Rethinking Bretton Woods | Sat, Feb 2, 2013
This paper co-published by Center of Concern and the Heinrich Boell Foundation comments on a December 2012 report by the University of Toronto and the Higher School of Economics (Moscow) entitled “Mapping G20 Decisions Implementation: How G20 is delivering on the decisions made.”
There are several efforts to assess the performance of the G20, including one by the G20 Research Group, University of Toronto and the Higher School of Economic (Moscow), which is the subject of this paper.
A December 2012 report entitled, “Mapping G20 Decisions Implementation: How G20 is delivering on the decisions made” attempts to determine the extent to which G20 decisions are implemented. It examines the record of implementation in seven key areas of G20 cooperation: 1) implementation of structural reforms, 2) overcoming imbalances, 3) international financial institutions reform, 4) financial markets regulation, 5) protectionism, 6) the phase out of inefficient fossil fuel subsidies, and 7) development.
For the policies in each of the areas, the report gives a rating of “1” for full compliance; “-1” for non-compliance; and “0” for partial compliance. This rating system applies to:
a) implementation of commitments by individual G20 member countries. For instance, in the area of fossil fuel subsidies, each individual G20 member country is expected to implement the commitment to abolish subsidies.
b) implementation of commitments made by the G20, as a collective, e.g., to reform of the voting system of the IMF.
The paper is careful to state that it “is focused on the implementation of decisions and does not attempt to estimate the impact or effectiveness of the G20 actions.” In that sense, it offers an honest disclaimer – namely, that it should not be construed as assessing whether the G20’s efforts are desirable or positive responses to global challenges. But, a casual reader of the “Mapping…” document might assume that G20 implementation of its commitments is desirable.
Moreover, the document does not critique the commitments or assess whether they are likely to lead to the desired outcomes. Yet the question asked by the “Preface” of the “Mapping…” document, “Has the G20 lived up to its early success as an anti-crisis mechanism and its claim to act as its members’ premier forum for the G20 international economic cooperation?” requires some assessment of the commitments and whether they are likely to prevent crises, such as the Global Financial Crisis.
This paper questions the implied premise of the report – namely, that implementation of G20 decisions is always or usually desirable. Specifically, it posits four circumstances in which implementation is undesirable and shows how, for a range of G20 commitments, this becomes evident.
Our comments also note:
a) where we differ with the “Mapping…” document’s assessments of G20 performance (e.g., increases in IMF resources or the comprehensiveness of reforms of the over-the-counter (OTC) derivatives market).
b) where we believe that assessments of certain G20 commitments have been omitted (e.g., investment protectionism and monetary reform),
c) where the document too uncritically accepts methodologies relied upon by the G20 (e.g., for trade or investment protectionism)
d) our view of document’s recommendations to the G20 (e.g., that the IMF’s Mutual Assessment Program (MAP) should include employment indicators or that, in reducing fossil fuel subsidies, it is necessary to have uniform approach to assessing subsidy efficiency and a unified and comprehensive data base on fossil fuel subsidies). We believe that the document should go further in recommendations relating to credit rating agencies.