From G7 to G20: Capacity, Leadership and Normative Diffusion in Global Financial Governance
01, March 2005
Author: John Kirton, Associate Professor Political Science, University of Toronto and Director, G8 Research Group
Abstract
The Group of Seven (G7) Finance Ministers forum and now Group of Eight (G8) Summit was created as a high capacity institution to deliberate, take decisions, deliver them, and develop global governance in response to the cascading financial and other crisis starting in the 1970’s. It was also created to diffuse globally its core principles of “open democracy, individual liberty and social advancement.” The changes brought by globalization, notably a succession of financial crises since 1994 and the terrorist shocks since September 11, 2001, have catalyzed the development since 1999 of a broader, more collectively capable Group of Twenty (G20) to help
provide global governance in finance and related fields. The G20’s expanded number and range of systemically important countries as members increases the capacity, representativeness and
resulting legitimacy of this new centre of collective leadership. But with non-democratic China and Saudi Arabia as members, and stability, growth and equity as core principles, to what extent can the G20 help globally diffuse the democratic norms its G8 members share? An analysis of the G20’s performance since its 1999 start suggests that the G20 has done much to adopt and diffuse democratic norms. The vulnerability and shocks bred by globalization shared by both members substantially helps explains this trend, as does the deepening institutionalization of the G20 as a balanced, autonomous, valued forum led by experienced hosts during the more shock free years since 2001. The strong G20 performance in democracy diffusion as well as in its deliberative, decisional and development of global governance functions sustains the case for elevating the G20 to a leaders level L20, for doing this deliberately rather than waiting for a new galvanizing shock, and for using the well performing G20 itself, rather than existing G8 or UN Summits as the institutional nest to give the L20 its birth.
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