A Brief History of the G20 Institutional Dynamics (2008-2021)

Abstract

The Group of 20 (G20) brought together leaders of the key advanced and emerging market countries to manage the 2007–08 financial and economic crises, reform the international architecture, devise a new global consensus, ensure recovery, and promote strong, sustainable, and balanced growth. Established as an anti-crisis mechanism and designated by its members as a premier forum for international economic cooperation, the G20 transformed into a global governance hub. Since its first summit, the G20 has generated high expectations and has become a subject of research and assessment for analysts, mass media, and the general public. Each summit’s deliberations, decisions, and engagements have been scrutinized. Critics of the G20 claim it has lost relevance and was not capable of responding to the degradation of multilateralism, or the COVID-19 pandemic and the crisis it induced. In this article, the logic of historical institutionalism is applied to explore the confluence of dynamics in the G20’s evolution: demand for G20 leadership; agenda expansion and institutionalization; and legitimation, accountability, and engagements. It is concluded that the G20 changed global governance trends, creating a more inclusive global governance that integrates the G20’s own extensive and diverse cooperation networks with the networks of the other international institutions and engagement groups involved in G20 policy processes. The networked governance, alongside the rotating presidency, the Troika, and various outreach mechanisms, augment the G20’s authority and reduce the legitimacy gap perception. The benefits from the early decisions, established and expanding agenda, patterns of engagement, cognitive scripts, embedded ideas, and internalized norms became strong endogenous sources of stability, reinforced in positive feedback loops. Despite tensions between members, the value that the G20 provides and the global public goods it generates, real and expected returns, constitute significant incentives for the G20’s continued engagement, sustain its evolving dynamics, and consolidate its path-dependency. The downside of the G20’s resilience is its inability to undertake innovative initiatives in the wake of COVID-19 or to provide the powerful leadership the world needed to overcome the pandemic and the related economic and social crises. Notwithstanding these failures, the G20 remains the crucial hub of contemporary global economic governance. However, the lock-in may entail the risk of losing relevance to other institutions.

G20 at the Critical Juncture. Indonesia’s 2022 Presidency: Internal and External Shocks, Risks of Power Rebalancing and Eventual Demise, Causes of Resilience and Re-Equilibrium

“…The IMF proposed a sizable general allocation of SDRs in spring 2020, but the G20 endorsed the IMF's proposal of 453 billion SDRs allocation a year later. exogenous pressures, and the members' vested interests acted as sources of the G20's resilience and sustained its dynamics in the face of crumbling multilateralism and COVID-19 shocks [Larionova, 2022]. In historical institutionalist (HI) terms, in 2020 these internal stability factors reinforced in numerous ongoing loops in the course of the G20 institutional dynamics were consolidated and preserved its equilibrium.…”