Behind the G20 Strategic Transformation: From Washington to Pittsburgh

Abstract:     
Crisis may become a change catalyst, just as the collapse of the Bretton Woods monetary system and the oil crisis of 1973 led to the establishment of the G4 and its subsequent development. Similarly, the 2007-2008 crisis was a turning point for the G20 cooperation framework. A coincidence of a cyclical recession, financial market anomalies and supervisory failures compelled the international community to rethink global crisis management toolkit.

The paper draws a general distinction between economic cycles and events particular to the recent crisis; subsequently responses of the G20 are divided for tactical, short-term measures and strategic, long-term initiatives. It is argued that the evolution of the G20 from a financial war room into a steering committee reflects those twofold challenges. Given the growing frequency of crises and interconnectivity of the world this is the desired direction. At the same premature initiatives of labour (and possibly agriculture) summits threatened the entire G20 project. Although the current political mood around the world provides grounds for a difficult reforms, disillusion of those already impatient with the austerity drive could prove extremely costly.

Number of Pages in PDF File: 14

Keywords: G20, Cannes summit, financial reform, global economic governance

JEL Classification: F02, F33, G18, G28

Accepted Paper Series