Return of the State? The G20, the Financial Crisis and Power in the World Economy

Abstract:     
The Group of Twenty and the new world order it is meant to signify have prompted a wave of triumphalism around the world from those who, like French President Nicolas Sarkozy, bemoan the influences of "Anglo-Saxon capitalism" and from neo-Marxists, who view the economic crisis as a harbinger of the resurgence of states over markets. A little over a decade ago, however, the late doyenne of international political economists, Susan Strange, wrote eloquently about the reasons why the state was in retreat, its structural power draining away in favour of markets. Have the intervening dozen years, with their recurrent crises in markets and corporate governance, demonstrated the need for a return of the state? This analysis of the G20 London communique, using criteria that Strange (1996) advanced, suggests that far from asserting a return of the state, the G20 signifies its persistent weakness and concludes that the G20 leaders, at least, sense a more complex network of power relationships, and that structural power rests in the network.

Number of Pages in PDF File: 17

Keywords: international political economy, G20, states, markets, network power, subprime, corporate governance

JEL Classification: B25, F02, F15, G18, G20, G30, H10, I10, P10

working papers series