G-Hero or G-Zero: Global Economic Governance After the Crisis

G-Hero or G-Zero: Global Economic Governance After the Crisis
The Summit on Financial Markets and the World Economy, November 2008, Washington, D.C. (White House photo by Joyce N. Boghosian).

One notable feature of the global economy over the half-decade since the collapse of Lehman Brothers has been the fluctuating fortunes of international economic cooperation in general and of the G-20 in particular. The G-20’s public reputation has taken a roller-coaster ride from hero to zero. The story of this rise and fall is also the story of the changing balance of (economic) power in the post-crisis global economy, and of the implications that this shift has had for how the world economy works—and how it doesn’t.

This story began when the onset of the financial crisis prompted the elevation of what had previously been a modest and little-reported meeting of finance ministers and central bank governors to a much more prominent meeting of the heads of state of the world’s most important economies. Given the inclusion of the BRICS and other key developing economies, as well as a sample of middle and regional powers, in the G-20’s membership, the group’s battlefield promotion was a powerful symbol of a changing international economic order: In the words of then-French President Nicolas Sarkozy, it foreshadowed “the planetary governance of the 21st century.” And when this upgraded version of the G-20 then proceeded to get off to a strong start with its first three summits in Washington, London and Pittsburgh, it was even possible for optimists to imagine a new era of global economic governance.

Yet within less than a year, the initial shine had come off the G-20 project. Old divisions, along with some new ones, had surfaced among the group’s members, and the Financial Times was moved to declare that the “G-20 show how not to run the world.” Since then, optimism has been replaced by widespread pessimism about the ability to deliver any kind of effective international cooperation at all. According to this worldview, the shift to a more multipolar world has the left the global economy with a dangerous leadership vacuum, an “empty driver’s seat” or a “G-zero.”

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