New Global Economic Architecture

New Global Economic Architecture

The Asian Perspective

ADBI series on Asian Economic Integration and Cooperation

Edited by Masahiro Kawai, Peter J. Morgan and Pradumna B. Rana

The global financial crisis of 2007-2009 exposed flaws and shortcomings in the global economic architecture, and has sparked an international debate about possible remedies for them. The postwar global architecture was essentially guided by the major developed economies, and was centered around the IMF, the GATT – the predecessor of the WTO – and the World Bank. Today, however, the balance of economic and financial power is shifting toward the emerging economies, especially those in Asia, and both global governance and economic policy thinking are beginning to reflect this shift. This book addresses the important question of how a regional architecture, particularly one in Asia, can induce a supply of regional public goods that can complement and strengthen the global public goods supplied through the global architecture. These public goods include institutions to help maintain financial stability, support more open trading regimes and promote sustainable economic development.

Chapter 3: The Group of Twenty: input and output legitimacy, reforms and agenda

Andrew F. Cooper

Subjects: asian studies, asian economics, economics and finance, asian economics, financial economics and regulation


The elevation of the Group of Twenty (G20) to the leaders’ level anticipated a new form of collective action at the apex of the global system. In a break from past situations of economic stress, whether the 1930s or early 1980s, key countries from both the old elite of states and a cluster of emerging powers were able to act together within a multilateral crisis committee process via the G20 and attendant institutions. In terms of form, speed and scope of agenda this process allowed an unprecedented degree of cooperation. Yet shared anxiety about a massive rupture of the system did not translate into an embedded set of shared interests or norms (Rachman 2010). Cooperation even in a concentrated forum via the G20 is not the same as consensus. Hanging together in a sustained fashion still faces enormous obstacles due not only to differences over outputs in terms of policy delivery but some serious gaps in terms of input legitimacy as well. The result is an awkward institutional arrangement, with some important innovative qualities (including an extension of insider status to an enhanced cluster of Asian countries including not only the People’s Republic of China (PRC) and India but also the Republic of Korea and Indonesia) but also some serious gaps in terms of efficiency and representation.

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