Abstract
As an informal grouping without headquarters, permanent staff or legal powers, the world’s major industrialized countries must rely on other actors, in particular international organizations, to manage global problems. This article examines how the Group of Eight contributes to global governance by cooperating with international organizations in the cases of debt relief and the fight against terrorist finance. It shows that the G8 draws on international institutions with the aid of government networks and argues that this cooperation is stronger, the greater the Group’s concentration of relevant power and the more important it considers the institutions’ resources.
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Notes
Russia became a formal member of the “political G8” in 1998, but it only obtained full and equal membership of the “economic G8” in 2006. In this article the term G8 is used unless it is essential to make a distinction between the G8 and the G7.
The financial sous-sherpas deal with topics such as monetary policy, debt and the international financial architecture, the foreign affairs sous-sherpas talk about environmental and development issues, and the political affairs directors (also from the ministries of foreign affairs) discuss regional questions, arms control, the fight against terrorism and drug trafficking.
The Group of Twenty is an informal forum of the finance ministers and central bank governors of 19 industrialized and emerging-market countries plus the European Union (EU) that promotes a dialogue on key issues related to global economic stability.
A notable exception is Ashgate’s “The G8 and Global Governance Series” published since 1999 under the auspices of the “G8 Research Group” of the University of Toronto. See also Gstöhl (2003).
I thereby use global governance in an analytical sense (i.e., how it works empirically), not in a normative sense (prescribing value-based solutions to global problems).
The Group’s first official “outreach” dialogue with civil society took place in 1998. In addition, a few G8 expert groups have in recent years brought in private actors.
Bailin (2001: 16–18) argues that a “group hegemon” requires a group identity which in the case of the G8 is established by the small number of participants, by restricting membership to capitalist democracies sharing a mutual interest in maintaining the liberal economic order, and by the Group’s public recognition accomplished through well-publicized great power summits. Volgy, Frazier, and Ingersoll (2003: 63) conclude on the basis of an analysis of G7 voting patterns in the UN General Assembly “that the group remains a strongly cohesive force.”
While “transnational” means relaxing the assumption that states are the only relevant actors in world politics, “transgovernmental” means relaxing the assumption that states act as units. Keohane and Nye (1974: 43–44) do not regard heads-of-state meetings as transgovernmental politics but only activities of lower-level bureaucracies. For the purpose of this article, however, the summits themselves are also considered part of transgovernmental relations. After all, heads of state or government do not necessarily represent a single position of the entire government apparatus but may, for instance, employ a two-level strategy to overcome domestic opposition (see Putnam, 1988: 457).
Policy networks may be defined as a set of relatively stable relationships which are of a non-hierarchical and interdependent nature linking a variety of actors who share common interests with regard to a policy and who exchange resources to pursue these shared interests (Börzel, 1998: 254).
In Slaughter’s stricter conception, vertical government networks involve only “supranational” institutions, that is, where international organizations have become sufficiently specialized to develop the equivalent of an executive, judicial, or even legislative branch.
Early in the summit process, leaders of international organizations were not invited because heads of state considered international secretariats and national bureaucracies alike part of the problem, not the solution (Schaetzel & Malmgren, 1980: 140). From today’s perspective, Baker (2006: 136) argues that “while the Managing Director is supposed to communicate the rest of the world’s interests to the G7, it is more common for the G7 to attempt to use the IMF and the Managing Director to express their views to the rest of the world.”
Since 1977 the EU participates in the summits and is represented by the Commission and the country holding the Presidency (in case of a non-G8 EU member). It cannot assume the presidency.
The “G8 Research Group” defines a commitment as a discrete, specific, publicly expressed, collectively agreed statement of intent, a “promise” or “undertaking” by summit members that they will take action to move toward, meet or adjust to an identified target (such as changes in the behavior of members, other countries, international institutions or private actors). See http://www.g8.utoronto.ca/evaluations/methodology/g7c2.htm (download 20/05/2006). Ougaard (2004: 78f) suggests to use the number of references to an organization in G8 summit declarations as an (admittedly crude) indicator. The number does, however, not inform us about the contents or importance of the aspired cooperation.
Baker (2006: 11) finds that G7 influence is “based on activities such as discourse construction, the promotion of shared causal and normative beliefs, mutual endorsement, persuasion and ultimately attempts to legitimate existing arrangements.”
The concept of policy export draws on EU literature regarding the accession and association processes (e.g., Christiansen, Petito, & Tonra, 2000).
Strictly speaking, the G8 demands made upon an international organization in summit declarations do not qualify as delegations in terms of the principal-agent theory. Such a definition of delegation implies a conditional grant of authority from a principal to an agent empowering the latter to act on behalf of the former, a relationship governed by a contract (cf. Hawkins et al., 2006-12-12) As members of an international organization, the G8 states have, of course, upon their accession delegated authority and they are able to revoke it, but this act is not linked to the summit requests. Moreover, policy networks are of a non-hierarchical nature.
According to Keohane (1984: 51), this kind of “cooperation requires that the actions of separate individuals or organizations—which are not in pre-existent harmony—be brought into conformity with one another through a process of negotiation, which is often referred to as ‘policy coordination’.”
For the purpose of this study, and for reasons of clarity, I distinguish between the notions of “power” and “resources”: whereas the G8 holds power, the other institutions dispose of resources.
From an International Relations perspective, this conception corresponds to the neoliberal institutionalist view that policies are largely shaped by an actor’s relative power position in a given issue area and its relative influence in an international institution.
The budget share is especially of interest as a supplementary indicator with regard to organizations based on the principle of “one country, one vote.” In fact, a budget’s scale assessments are often associated with issue-specific power.
Arts (2001: 44) defines resources as “facilities to which policy coalitions (may) have access and which coalitions mobilise to influence the course of action in a policy domain.”
If international secretariats are members of (vertical) government networks, “their distinctive resources tend to be information and an aura of international legitimacy” (Keohane & Nye, 1974: 52).
From an International Relations perspective, the perceived relevance of resources introduces a constructivist element. Moreover, legitimacy is socially constructed.
Regarding the two independent variables, the importance of resources weighs in more heavily than the Group´s power concentration because the G8 has no reason to cooperate with international institutions if it expects no benefits from doing so.
Baker (2006: 234–238) finds that in global financial governance the U.S. retains a pre-eminent position in the G7 but has been constrained by growing market authority and shared multilateral norms.
The Group maintains no own expert groups in the field of debt relief. Initially, finance ministers met annually at the summit site. The 1986 Tokyo summit officially set up the G7 finance ministers´ group as a separate entity that meets four or more times a year, usually attended also by the central bank governors and often by the Managing Director of the IMF.
Russia has pledged to repay its debts to the Paris Club in full by the end of 2006, and it has already prepaid debts to the IMF, owing to the soaring energy prices.
This article only considers debt owed to public creditors since governments or international organizations cannot forgive debts owed to private creditors.
The World Bank classification of SILICs is not completely identical with that of the HIPCs, but there is a 90% overlap between the two groups.
International organizations such as the OECD or the Bretton Woods institutions publish statistics on the debts of individual countries but, unfortunately, no information on the individual creditors.
cf. IMF, Annual Reports of the Executive Board, various years.
Obviously, if acting as a group, the G7 might exercise a veto as well.
cf. World Bank, Annual Reports, various years.
Permanent members are the G7 countries, Austria, Australia, Belgium, Denmark, Finland, Ireland, The Netherlands, Norway, Spain, Sweden, Switzerland, and since 1997 Russia. Other creditors may join for specific negotiations. Since 1974 the Club maintains a secretariat in Paris (http://www.clubdeparis.org). Rescheduling for private debts takes place in the so-called London Club.
Statements may also be issued by the other observers (World Bank, OECD, UNCTAD, EU, regional development banks), but the IMF opinion is of crucial importance. Since 1966 an agreement with the IMF has been considered a precondition for rescheduling debts in the Paris Club.
All G7/G8 documents subsequently cited are available at http://www.g8.utoronto.ca/summit or http://www.g8.utoronto.ca/meetings.html.
For example, in exchange for forgiving part of Mexico’s debt, the (reduced) principal and interest of the new bonds banks received were securitized by U.S. Treasury bonds.
At the 1989 Paris summit, for instance, the G7 leaders underlined that “banks should increasingly focus on voluntary, market-based debt and debt-service reduction operations, as a complement to new lending.”
The “Toronto terms” for the poorest debtor countries came close to the “Brady terms” earlier on offered to the middle-income debtor countries mainly from Latin America.
The initiative is open to the poorest countries that: (1) are eligible only for highly concessional assistance such as from the IDA and the IMF’s ESAF; (2) face an unsustainable debt situation even after the full application of traditional debt relief mechanisms; and (3) have a proven track record in implementing strategies focused on reducing poverty and building the foundation for sustainable economic growth. In 1996, 41 countries were eligible under the HIPC initiative. See http://www.worldbank.org/debt and http://www.imf.org/external/np/hipc.
Reaching the decision points means that all creditors commit to a debt relief (to be delivered at the completion point) in order to bring the debt to a sustainable level.
In addition, about 70% of the bilateral donor pledges to the HIPC Trust Fund came from the G7 (IMF & IDA, 2004).
The Millennium goal to develop “a global partnership for development” calls for an enhanced program of debt relief for heavily indebted poor countries and cancellation of official bilateral debt.
The African Development Fund provides development finance on concessional terms to member countries which are unable to borrow on the normal terms of the African Development Bank.
Unfortunately, Baker spends only four pages on official debt relief in his pioneering book on the G7’s role in global financial governance, even though he considers it “an area in which the finance ministries have had most scope to take action independently of other actors” (Baker, 2006: 222).
http://www.fatf-gafi.org “Money Laundering FAQ” (download 20/05/2006).
The G7 countries rank low on the Corruption Perceptions Index provided by Transparency Internationalhttp://www.transparency.org/cpi).
U.S. Department of State, Patterns of Global Terrorism, various years.
cf. UN, Yearbook of the United Nations, various years. In the long run, it seems unlikely that the richest members finance decisions against their own interests taken by a majority of developing countries in the UN General Assembly. In the informal “Geneva Group” the 14 largest contributors to the UN and UN specialized agencies—among them all G8 countries—monitor the budgets to which they contribute over 80%.
Information provided by the OECD Budget and Finance Service.
Many years later, the UNODC has in 1997 established a Global Programme against Money Laundering and in 2002 a Global Programme against Terrorism.
The summit also gave the group an open-ended mandate to implement the recommendations in the G8 states and, where possible, throughout the world. The Lyon Group has since developed numerous specialized sub-working groups which are involved in preparing the meetings of the G8 justice and interior ministers and report to the summits from which they receive new tasks.
In addition, the G8 countries announced new non-proliferation measures (e.g. action plans on securing radioactive materials, tanker safety or the transport security and control of Man-Portable Air Defence Systems). The summit in Sea Island in 2004 added a G8 Secure and Facilitated International Travel Initiative.
In May 2006 the Secretary-General presented the corresponding report (UN General Assembly, 2006).
As many emerging market countries are turning into net creditors themselves, the Paris Club is also looking for new members (Financial Times, 2006).
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For most helpful comments I would like to thank the anonymous reviewers of the RIO.
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Gstöhl, S. Governance through government networks: The G8 and international organizations. Rev Int Org 2, 1–37 (2007). https://doi.org/10.1007/s11558-006-9004-8
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DOI: https://doi.org/10.1007/s11558-006-9004-8