A Framework for Assessing Global Economic Governance

IntroductionGlobal economic governance has become more complex over the past twenty years. The range of issues that require global coordination now include topics which were once viewed as falling exclusively within a state's domestic jurisdiction, such as banking regulation, inclusive green growth, youth employment, and domestic resource mobilization.1 This period has also seen the rise of new global governance actors, such as the Group of Twenty ("G20")2 and the Financial Stability Board ("FSB").3 As a result, global economic governance directly affects a broad range of state and non-state stakeholders in the global economy, many of whom were previously only indirectly affected by these matters.4Unfortunately, most of these stakeholders are not able to partici- pate effectively in global economic governance decision making.5 In some cases, such as with the G20 or the FSB, membership is restricted to a relatively small number of states.6 In other cases, such as with the International Organization of Securities Commissions ("IOSCO")7 or the International Monetary Fund ("IMF"),8 it is because, although membership is more universal, effective participation is de facto limited to a smaller number of actors.9The combination of the expanding scope of global economic gov- ernance and restricted effective participation in the institutional ar- rangements for global economic governance is problematic. It in- creases the risk of unanticipated adverse impacts on non-participants in global economic governance decision making. Given the increasing intensity of globalization, this situation is likely to get worse unless some means can be found for enhancing the key decisionmakers' respon- siveness to non-participants in their deliberations. One way to do this is to critically assess how well these decisionmakers are serving the inter- ests of all stakeholders in the global economy.This Article proposes a five-part test for making such an assessment of global economic governance. The test considers its strategic objec- tive, its compliance with applicable international legal principles and good administrative practice, the scope of its coverage of the relevant issues and stakeholders, and the coherence of its institutional relations. Part I describes the current arrangements for global economic govern- ance.10 Part II proposes four factors of good global economic govern- ance efforts and develops a five-part test to evaluate international insti- tutions' performance.11 Finally, Part III applies the proposed assessment framework to the outputs of the 2012 G20 Summit in Los Cabos, Mex- ico.12 Based on this test, the Article concludes that the G20 is unable to comply fully with any of the four factors of good global governance.13I. Current Arrangements for Global Economic GovernanceFollowing World War II, the primary actors in global economic governance were the IMF, the International Bank for Reconstruction and Development ("World Bank"), and the General Agreement on Tar- iffs and Trade ("GATT").14 The Bank of International Settlements ("BIS") also played a role, albeit a subordinate one.15 Each of these in- stitutions have specialized mandates.16 Over the following decades, the number of key actors in global economic governance grew to include the Group of Seven ("G7")17 and the International Monetary and Fi- nance Committee,18 as well as international standard-setting bodies, including the Basel Committee on Banking Supervision,19 IOSCO,20 the International Association of Insurance Supervisors,21 the Interna- tional Accounting Standards Board,22 and the Financial Action Task Force.23Recently, two new global economic governance entities, the G20 and the FSB, were created. These organizations are discussed below.24A. The G20Prior to 2008, the overall manager of the global economic system was the G7/G8.25 In 1999, in the wake of the Asian financial crisis,26 the G7 recognized that it could not manage the crisis on its own, and its leading members invited the ministers of finance from a select group of countries, including the G7 countries and the European Union, to meet. …