P. 1
WP_2012_04

WP_2012_04

|Views: 2,130|Likes:
Published by Bruegel

More info:

Published by: Bruegel on Mar 13, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

09/02/2013

pdf

text

original

If views diverge on timing, even more they do on interpretation. Some regard the passage to from the
'crisis' to the 'governance' phase as a sign of maturity, the G20 being able to demonstrate (or at least
not to immediately contradict) its ability to last beyond the emergency and make a positive
contribution also in normal times. Some see it following the path that led the G7 to transform from
focused and effective to grandiose, all-encompassing and largely ineffectual.

In the crisis management mode the heads of state took direct responsibility for both macroeconomic
and financial regulation decisions. A simple comparison between the broad and vague G7

42

communiqués and those issued at the first G20 summits provides strong evidence of this
extraordinarily hands-on behaviour. This was evidently not sustainable. It is not the role of heads and
state and government to dictate the details of financial regulatory reform and a normalisation was
both inevitable and desirable. In normal times it is more appropriate for the G20 to function “as a
steering committee that provides political energy and direction to international standard setters and
also assesses progress of implementation”, to quote from Dan Price (2011), the former Sherpa of
President George W. Bush. One of us (Angeloni, 2009), in commenting post-Pittsburgh
developments, has taken a similar view.

Observers also emphasise the change in style and the deterioration in public communication
between the two phases. Critics argue that the G20 will not be able to display, in a climate of
economic recovery and stabilised financial markets, the same alertness and effectiveness it showed
as a crisis manager. History can be suggestive; Woods (2010) notes that a similar regress
characterised, years earlier, the G20 Finance Ministers formation. Created in 1999 to respond to the
global risks generated by the Asian crisis, hence in a crisis management spirit, the G20 ministerial
formation gradually transformed itself, inadvertently, in a non-committal discussion forum, and its
influence declined. G20 summits could follow a similar fate.

To a certain extent, therefore, the move from a 'crisis management' to a 'governance' mode results
more from the G20’s current capabilities than from the nature of the situation it is confronted to.
Against the background of a serious deterioration of the global economic situation, this evolution
involves risks: a G20 that would fail to address the priority problems of global adjustment and growth
would soon lose the legitimacy earned in the management of the 2008-2009 global crisis.

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->