Interaction between the G20 agenda and members’ national-level policy: A theoretical model for increasing G20 effectiveness

ABSTRACT

Based on regime theory and orchestration-intermediary theory on the interaction of international institutions, complemented with a revisionist realist perspective, this article proposes a theoretical model to examine the effectiveness of the G20 agenda. The theoretical model consists of weighing up a member state’s willingness and capacity to build a political coalition and technical support from relevant intermediary institutions on a G20 agenda, as well as the use of coercion or soft power pressure by the political coalition behind the agenda. Employing a case study approach, the article illustrates the theoretical process by examining (1) the Enhanced Structural Reform Agenda and (2) the green finance agenda at the G20 Hangzhou Summit of 2016. The article concludes that any real progress achieved on the G20 agenda in the post-crisis period requires the presence of all factors in the theoretical model and provides recommendations on improving the G20’s effectiveness based on the case studies.

KEYWORDS:

• G20
• effectiveness
• regime theory
• orchestration-intermediary theory
• political coalition
• enhanced structural reform agenda
• green finance agenda
• China

ORCID

Alex He http://orcid.org/0000-0002-9649-6623

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Alex He obtained his PhD from the Chinese Academy of Social Sciences Graduate School in Beijing. China. He is currently a research fellow at the Centre for International Governance Innovation (CIGI) in Canada. His work focuses on China and global economic governance, the G20, domestic politics in China and their role in China’s foreign economic policy making.

Notes

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19 Zhu J, ‘Cooperation between international regimes and the G20’s institutional transition – A case study of anti- tax evasion governance [国际间机制合作与G20机制转型 --- 以反避税治理为例]’, Global Review [国际展 望], 5, 2015.

20 Abbott KW et al. (eds), International Organizations as Orchestrators. Cambridge: Cambridge University Press, 2015; Abbott KW et al., ‘Two logics of indirect governance: Delegation and orchestration’, British Journal of Political Sciences, 46, 4, 2016, pp. 719–29.

21 Many thanks to the peer reviewer who pointed out that the G20 may also rely on actions by member states to achieve goals. This section focuses on the relations between the G20 and IGOs in the orchestrator-intermediary theory. The role of member states will be discussed in the next section.

22 Viola LA, ‘Orchestration by design: The G20 in international financial regulation’, in Abbott KW et al. (eds), International Organizations as Orchestrators. Cambridge: Cambridge University Press, 2015, pp. 88–113.

23 These achievements include the establishment of a new global standard for international anti-tax evasion cooperation: the automatic exchange information among tax authorities, as well as the agreement of the Inclusive Framework on the Base Erosion and Profit Shifting (BEPS) among 115 countries and jurisdictions that include both major developed and developing countries. See Hakelberg L, ‘Coercion in international tax cooperation: Identifying the prerequisites for sanction threats by a great power’, Review of International Political Economy, 23, 3, 2016, pp. 511–41; Emmenegger P, ‘Swiss banking secrecy and the problem of international cooperation in tax matters: A nut too hard to crack?’, Regulation & Governance, 11, 2017, pp. 24–40; Eccleston R & G Felicity, ‘Foreign accounts tax compliance act and American leadership in the campaign against international tax evasion: Revolution or false dawn?’, Global Policy, 5, 2014, pp. 321–33; Zhu J, ‘Cooperation between international regimes and the G20’s institutional transition – A case study of anti-tax evasion governance [国际间机制合作与 G20机制转型--- 以反避税治理为例]’, Global Review [国际展望], 5, 2015.

24 G20 Research Group, St. Petersburg Action Plan, 6 September 2013, <http://www.g20.utoronto.ca/2013/2013-0906-plan.html>.

25 Hilbrich S & J Schwab, ‘Towards a more accountable G20? Accountability mechanisms of the G20 and the new challenges posed to them by the 2030 Agenda’, Discussion Paper, 1. Bonn: German Development Institute, 2018.

26 G20 Research Group, The St. Petersburg Accountability Assessment, 2013, <http://www.g20.utoronto.ca/2013/Accountabilty_Assessment_FINAL.pdf>; G20 Research Group, The Brisbane Accountability Assessment, 2014, <http://www.g20.utoronto.ca/2014/2014_accountability_assessment_report.pdf>.

27 G20 Research Group, The St. Petersburg Accountability Assessment, 2013, <http://www.g20.utoronto.ca/2013/Accountabilty_Assessment_FINAL.pdf>.

28 G20 Research Group, Antalya Accountability Assessment, 2015, <http://www.g20.utoronto.ca/2015/Accountability-Assessment-Report.pdf>.

29 Ibid. G20 Research Group, Hangzhou Accountability Assessment, 2016, <http://www.g20.utoronto.ca/2016/hangzhou-accountability-assessment-report.pdf>.

30 G20 Research Group, Hangzhou Action Plan, 2016, <http://www.g20.utoronto.ca/2016/160905-action.html>; Ministry of Foreign Affairs of Japan, G20 Enhanced Structural Reform Agenda, 2016, <https://www.mofa.go.jp/files/000185875.pdf>.

31 Han J & C Shen, ‘Minister of Finance Lou Jiwei on the outcomes of the financial track at the G20 Hangzhou summit [财政部部长楼继伟谈G20杭州峰会财金渠道成果]’, Xinhuanet, 28 August 2016, <http://www.xinhuanet.com/world/2016-08/28/c_1119467552.htm>.

32 Yicai Media Group, ‘Exclusive interview with Zhou Qiangwu: China’s deep footprint at Hangzhou summit [专访周强武: G20杭州峰会 中国留下深刻印记]’, 4 September 2016, <https://www.yicai.com/news/5086777.html>.

33 OECD, OECD Technical Report on Progress on Structural Reform Under the G20 ESRA, 12 April 2017.

34 Ibid.

35 G20 Research Group, G20 Leaders’ Declaration: Shaping an Interconnected World, 2017, <http://www.g20.utoronto.ca/2017/2017-G20-leaders-declaration.html>.

36 G20 Research Group, G20 Hamburg Action Plan, 2017b, <http://www.g20.utoronto.ca/2017/2017-g20-hamburg-action-plan.html>.

37 G20 Research Group, Buenos Aires Action Plan, November 2018, <http://www.g20.utoronto.ca/2018/2018-buenos-aires-action-plan.html>.

38 Xinhuanet, ‘President Xi hosted the 11th meeting of the Central Leading Group on Financial and Economic Affairs [习近平主持召开中央财经领导小组第十一次会议]’, 10 November 2015, <http://www.xinhuanet.com/politics/2015-11/10/c_1117099915.htm>.

39 G20 Research Group, Communiqué of G20 Finance Ministers and Central Bank Governors Meeting, 27 February 2016, < http://www.g20.utoronto.ca/2016/160227-finance-en.html>.

40 G20 Research Group, G20 Leaders’ Communiqué: Hangzhou Summit, 5 September 2016, <http://www.g20.utoronto.ca/2016/160905-communique.html>.

41 Yicai Media Group, ‘Exclusive interview with Zhou Qiangwu: China’s deep footprint at Hangzhou summit [专访周强武: G20杭州峰会 中国留下深刻印记]’, 4 September 2016, <https://www.yicai.com/news/5086777.html>.

42 White House, ‘Fact sheet: US-China economic relations’, 4 September 2016, <https://obamawhitehouse.archives.gov/the-press-office/2016/09/04/fact-sheet-us-china-economic-relations>. Xinhua News Agency, ‘Full text: Chinese outcome list of the meeting between the Chinese and U.S. Presidents in Hangzhou’, 2016, <http://www.china.org.cn/world/2016-09/04/content_39231278.htm>.

43 Ibid.

44 European Commission, ‘The EU at the G20 summit in Hangzhou: Joint letter of Presidents Juncker and Tusk’, 30 August 2016, <http://europa.eu/rapid/press-release_STATEMENT-16-2922_en.htm>.

45 Shuai R et al., ‘China plays a constructive role in global economic governance via the G20 [中国借G20平台在全球经济治理中发挥建设性作用]’, Xinhuanet, 8 August 2016, <http://www.xinhuanet.com/fortune/2016-08/08/c_1119354483.htm>; Xu L, ‘What the world and China gain at the G20 summit [G20峰会: 世界和中国收获了什么]’, Beijing Times[京华时报], 12 September 2016.

46 Lagarde C, ‘Opening remarks by Christine Lagarde, Managing Director at the G20 seminar on structural reforms’, IMF, 26 February 2016, <https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp022616>.

47 The G20 Enhanced Structural Reform Agenda itself was prepared by the G20 Framework Working Group in September 2016.

48 OECD, Structural Reform Priorities for the G-20, April 2016.

49 Ministry of Foreign Affairs of China, ‘Full text: Joint rress release on the second ‘1+6’ Roundtable’, 13 September 2017, <https://www.fmprc.gov.cn/mfa_eng/wjdt_665385/2649_665393/t1492485.shtml>.

50 Lagarde C, ‘Opening remarks by Christine Lagarde, Managing Director at the G20 seminar on structural reforms’, IMF, 26 February 2016, <https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp022616>.

51 ‘Green growth’ means fostering economic growth while reducing pollution and greenhouse gas emissions, minimising waste and improving efficiency in the use of natural resources, according to the OECD: <https://www.oecd-ilibrary.org/environment/green-finance-and-investment_24090344>.

52 PBoC and UNEP Inquiry, Establishing China’s Green Financial System: Final Report of the Green Finance Task Force, April 2015.

53 Ibid.

54 Ibid.

55 G20 Green Finance Study Group, G20 Green Finance Synthesis Report, September 2016, <http://unepinquiry.org/wp-content/uploads/2016/09/Synthesis_Report_Full_EN.pdf>.

56 PBoC and UNEP Inquiry, Establishing China’s Green Financial System: Final Report of the Green Finance Task Force, April 2015.

57 UNEP Inquiry, Making Waves: Aligning the Financial System with Sustainable Development, April 2018, pp. 8–10.

58 UNEP, Financing Sustainable Development: Moving from Momentum to Transformation in A time of Turmoil, 2016.

59 Green Finance Initiative, City of London Corporation, Globalising Green Finance: the UK as an International Hub, November 2016.

60 GOV.UK, U.K.-China 6th Economic and Financial Dialogue: Policy Outcomes Paper, 12 September 2014, <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/354137/UK-China_policy_outcomes.pdf>.

61 Ma J, The G20 and China: Green Finance [G20与中国: 绿色金融]. Beijing: Foreign Languages Press, 2016.

62 Li L, ‘Green finance has gradually become financial development mainstream: Interview with Ma Jun [绿色金融渐成金融发展的主流趋势]’, International Financing [国际融资], 11, 2018.

63 Mair V, ‘How China, as head of the G20, is spearheading a global green finance push’, Responsible Investor, 30 March 2016, <http://web.unep.org/inquiry/blog/how-china-head-g20-spearheading-global-green-finance-push>.

64 GOV.UK, U.K.-China 7th Economic and Financial Dialogue: factsheet, 21 September 2015, <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/473734/ChinaEFD7_Factsheet.pdf>.

65 Stichele MV, ‘A new topic at the G20: “Green Finance”’, 11 May 2016, <https://www.somo.nl/a-new-topic-at-the-g20-green-finance/>; BBC, ‘Mark Carney: Green finance “a major opportunity”’, 22 September 2016, <https://www.bbc.com/news/business-37446120>.

66 BBC, ‘Mark Carney: Green finance ‘a major opportunity’’, 22 September 2016, <https://www.bbc.com/news/business-37446120>.

67 Yicai Media Group, ‘German 2017 G20 presidency made decision to continue the issue of green finance [德国 决定2017年G20继续绿色金融议题]’, 10 October 2016, <https://www.yicai.com/news/5130877.html>; Ma J, ‘German 2017 G20 presidency made decision to continue the issue of green finance [德国决定2017年G20继续 绿色金融议题]’, 8 October 2016, <http://www.sohu.com/a/115632757_465450>.

68 Robins N, ‘2017: What next for green finance?’, 16 January 2018, HuffPost, <https://www.huffpost.com/entry/2017-what-next-for-green_b_14203706>; Ma J, ‘Latest progress on the international cooperation of green finance[绿色金融国际合作的若干前沿进展]’, 30 May 2018, <http://www.greenfinance.org.cn/displaynews.php?id=2151>.

69 Alexander N, ‘The priorities of Argentina’s G20 presidency’, 5 January 2018, <https://us.boell.org/2018/01/05/priorities-argentinas-g20-presidency>; Stichele MV, ‘A new topic at the G20: ‘Green Finance’’, 11 May 2016, <https://www.somo.nl/a-new-topic-at-the-g20-green-finance/>.

70 Paulson Institute, ‘The green team speaks to Simon Zadek’, 1 March 2018, <http://www.paulsoninstitute.org/the-green-scene/2018/03/01/the-green-team-speaks-to-simon-zadek/>.

71 Paulson Institute, ‘New developments from the international green finance forum’, 30 November 2018, <http://www.paulsoninstitute.org/the-green-scene/2018/11/30/new-developments-from-the-international-green-finance-forum/>.

72 Unlike the last two summits, the Green Finance Study Group or the Sustainable Finance Study Group was not mentioned in any official documents of the G20 Osaka Summit. See also: Markets Insider: ’Fair Finance Asia calls upon G20 leaders to promote sustainable and responsible finance’, 27 June 2019, <https://markets.businessinsider.com/news/stocks/fair-finance-asia-calls-upon-g20-leaders-to-promote-sustainable-and-responsible-finance-1028315627>.

73 Litman G, ‘Is G20-led multilateralism reaching its limits?’, Background Paper for Trilogue Salzburg, 2017, p. 20.

74 UNEP Inquiry, Making Waves: Aligning the Financial System with Sustainable Development, April 2018.

75 There is no way to confirm that the reason for achieved progress on structural reform is because the member state was encouraged by or following the priority areas, the principle, and indicators set under the ESRA. In some case scenarios, it can be proved that the progress is not the result of the ESRA. For example, progresses mentioned in the OECD assessment report such as the increased total spending on R&D, the decreased Gini index since 2007, and the eased regulator barriers to trade are not made under the ESRA as the timeline in the report explains that these progresses were made before September 2016, when ESRA was finally set. OECD, OECD Technical Report on Progress on Structural Reform Under the G20 ESRA, 12 April 2017.