The EU offers useful tool for the G20

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There a clear mismatch between G20 meeting agreements and their implementation afterwards, and the new global governance tool could benefit from the EU's experience of the Open Method of Coordination, argues Henning Meyer from the London School of Economics and Political Science.

Henning Meyer is senior visiting fellow at the Government Department of the London School of Economics and Political Science. Previously he was head of the European Programme at the Global Policy Institute in London and a visiting fellow at the Industrial and Labor Relations School at Cornell University.

This analysis is a summary of the study 'The Open Method of Coordination: A Governance Mechanism for the G20?'. To read the study in full, please click here.

"The world's political leaders are gathering in Cannes for the G20 meeting and they have a very difficult agenda ahead of them. Not only does the decision by Greek Prime Minister George Papandreou to hold a referendum on the latest EU rescue package for his crisis-stricken country put the recent EU summit agreements in doubt, there are also wider economic issues that the leaders of the world’s most influential economies and the EU need to address.

Too many Western countries still suffer from a lack of growth and high unemployment. There are still significant imbalances in current and capital accounts that need to be addressed, and the recent debt crisis has also shown that in the area of financial-sector reform there remains a lot of work to be done to make the system resilient and sustainable. So in many respects the Cannes G20 reminds observers of the crisis G20 meeting of 2009 that took place in London. Bold solutions to global economic problems once again need to be found.

But is the G20 in its current form actually able to deliver these bold solutions, even if there is agreement amongst political leaders? Have the agreements of the London G20, for instance, really created a 'new world order' as the then-British Prime Minister Gordon Brown declared? The evidence so far suggests that there is a clear mismatch between meeting agreements codified in the communiqués and their implementation afterwards. This lack of follow-through effectiveness illustrates an important dilemma: Global policy challenges require an efficient G20 but the institution currently lacks the implementation capabilities to really tackle these policy issues.

The G20 at the head of state or government level was created as an emergency institution in the wake of the 2007/2008 financial crisis and it is still trying to make the transition from an emergency meeting into a more permanent part of the global governance setup, potentially also dealing with issues beyond economic matters. For this transition to take place, however, the G20 necessarily needs to improve its effectiveness.

In a study published by the Brussels office of the Bertelsmann Foundation, my co-authors and I make the argument that it is worthwhile looking at the experience of the European Union as a laboratory for supranational governance mechanisms when trying to figure out how to reform the G20. The EU’s experience with the Open Method of Coordination (OMC) in particular is very insightful as it is the most developed supranational governance mechanism that sits in between full supranationalisation of national competencies (unfeasible for the G20) and loose cooperation without clear processes and structures after summits (what the G20 has at the moment).

In the study we argue that an adapted version of the EU’s OMC would be a suitable way to improve the institutions effectiveness. How would this work in practice?

First, the agreements of G20 communiqués would have to be developed into more specific short-, mid- and long-term goals that are linked to timetables. This can be done in cooperation and agreement with national governments in the aftermath of G20 summits. Second, these goals need to be further broken down into quantitative and qualitative indicators that do not follow one-size-fits-all approaches but take the individual circumstances of members into account. In a third step, specific regional and national policies would be developed to achieve these goals. And fourth, there needs to be permanent evaluation and peer review to assess whether members are on track to fulfilling the commitments they signed up to in the communiqué.

These reform proposals would of course not solve all policy-making issues the G20 faces but we believe they would represent a move into the right direction. The basic argument for global governance – the need to regulate and channel the many social, economic, environmental, technological and cultural processes that now transcend the limits of national and regional governance – is more relevant than ever. With existing global governance institutions suffering from severe deficiencies and international talks on important issues such as global trade and climate change often stalled or unsuccessful, there is a real need for governance institutions that involve the key global players and are capable of effectively addressing pressing global policy issues.

In this context, the ascendancy of the G20 has been a breath of fresh air even though it remains incomplete as an institution and its success will be determined whether the challenges it faces can be successfully addressed. The move from an emergency institution to a permanent component of global governance will crucially depend on how the effectiveness of the G20 can be further improved. Given the magnitude of the global challenges currently being discussed in Cannes, it is imperative that we create an institutional framework with more bite."

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