The G20 should to be replaced by a legitimate and effective global economic governing body, according to new research in the September issue of the London School of Economics and Political Sciences’ journal Global Policy published today.
The research paper argues that the G20’s membership does not meet defensible criteria, and cannot be “reverse engineered” from a formula based on a country’s global economic importance. There is no mechanism for adding or dropping countries as their relative economic importance changes over time.
Furthermore, the 19 country members represent only themselves which means that 90 per cent of the United Nations’ 193 member states are unrepresented. Some regional organisations like the African Union are invited to send representatives, but they sit as observers rather than full participants.
Robert Wade, Professor of Political Economy and Development at LSE and one of the authors of the paper, said: “The G20 reinforces a trend towards a ‘multilateralism-of-the-big’ in which the vast majority of the nations have no voice on matters that may crucially affect them because they are not incorporated into any representational system.
“Currently Africa is grossly under represented within the G20, with only South Africa being a full member, and low income countries are completely excluded”.
The researchers propose that the G20 be replaced with a Global Economic Council (GEC), based on a modified version of the constituency system used by the World Bank and International Monetary Fund (IMF). They suggest that all three institutions should be brought into line with this system so they all have the same constituencies.
The GEC, along with the World Bank and IMF, should be made up of 25 seats, 16 of which should be allocated among four regions – Africa, the Americas and Australasia, Asia and Europe. The nine remaining seats would be allocated on the basis of economic weight, as measured by GDP.
Dr Jakob Vestergaard, from the Danish Institute for International Studies and co-author of the paper, said: “Having a voting power system that reflects relative economic weight will help address the legitimacy problems of these institutions.
“Our proposed system would also give long term stability to global economic governance because it responds to the rise and fall of nations and regions through a transparent, automatically updated system of weighted voting – based on GDP. It also ensures a certain level of inter-regional legitimacy and stability, balancing the allocation of chairs to all the world’s regions.”
Wade and Vestergaard also recommend that the GEC should exercise strategic oversight over the World Bank and IMF and possibly other United Nations economic and social agencies.
The members of the G20 are: Argentina; Australia; Brazil; Canada; China; France; Germany; India; Indonesia; Italy; Japan; Mexico; Russia; Saudi Arabia; South Africa; Korea; Turkey; United Kingdom; United States ; European Union.
This issue of Global Policy also includes a special section looking at how the rise of Asia affects the challenge of governing health in a globalising world. It tackles Asian contributions to three key instruments of global health care – the International Health regulations, Pandemic Influenza Preparedness Framework and the Framework Convention on Tobacco Control. It also includes an analysis of the foreign health aid strategies of China, India and Japan.
Posted Monday 10 September 2012
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