Hostname: page-component-586b7cd67f-t8hqh Total loading time: 0 Render date: 2024-11-27T11:07:37.017Z Has data issue: false hasContentIssue false

Global politics are domestic politics: a societal approach to divergence in the G20

Published online by Cambridge University Press:  12 July 2012

Abstract

Since 2008, the leaders of industrialised and emerging economies have engaged in steering the global economy through the G20. Divergent national positions were to be expected based upon the different stages of economic development and according to previously existing international groups. The actual controversies in the G20 did not reflect these patterns, however, but showed divergence both between industrialised countries and between emerging economies. In explaining this puzzle, I argue that the driving forces for global economic governance have ceased to be industrialised or emerging countries' alliances and levels of development. Rather, the causes for the positions of G20 members can be found in economic interests and ideas dominant in the domestic politics of countries. These societal influences shape governmental preference formation in both industrialised and emerging countries and consequently influence their behaviour in global governance. The resulting divergences weaken previously existing groups such as the G7 and the BRICs, and create a new pattern in world politics. This societal approach to explaining governmental positions in global economic governance is exemplified on the core G20 issues of stimulus/public debt and global imbalances/exchange rates.

Type
Articles
Copyright
Copyright © British International Studies Association 2012 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, Republic of Korea, Turkey, United Kingdom, United States, and the European Union. The G20 was founded 1999 but has convened on the leaders' level only since 2008.

2 Members of the G7 are Canada, France, Germany, Italy, Japan, United Kingdom, and the United States. In 1998 Russia was included as an associated member.

3 Schirm, Stefan A., ‘Leaders in Need of Followers. Emerging Powers in Global Governance’, European Journal of International Relations, 16:2 (2010), pp. 208–12CrossRefGoogle Scholar.

4 Armijo, Leslie Elliot, ‘The BRICs Countries (Brazil, Russia, India, and China) as Analytical Category: Mirage or Insight?’, Asian Perspective, 31:4 (2007), pp. 742Google Scholar; de Freitas Barbosa, Alexandre and Mendes, Ricardo, ‘Is there a Brazilian strategy for the G20?’, in Fues, Thomas and Wolff, Peter (eds), G20 and Global Development (Bonn: German Development Institute 2010)Google Scholar; Brawley, Mark R., ‘Building Blocks or a BRIC Wall? Fitting U.S. Foreign Policy to the Shifting Distribution of Power’, Asian Perspective, 31:4 (2007), pp. 151–75Google Scholar.

5 Drezner, Daniel W., ‘Bad Debts. Assessing China's Financial Influence in Great Power Politics’, International Security, 34:2 (2009), p. 40CrossRefGoogle Scholar; Roett, Riordan, The New Brazil (Washington DC: Brookings Institution Press 2010), pp. 133–40Google Scholar.

6 Daniel W. Drezner, ‘Can the G-20 be Legitimate and Effective?’, paper prepared for the 2nd Princeton Global Governance Conference (14–15 January 2011); Woods, Ngaire, ‘Global Governance after the Financial Crisis: A New Multilateralism or the Last Gasp of the Great Powers?’, Global Policy, 1:1 (2010), pp. 5163CrossRefGoogle Scholar.

7 Official G20 site: {www.g20.org/about_index.aspx}; Francoise Nicolas and Wonhyuk Lim, ‘From the Korean to the French Presidency: Ensuring the G20's transition to a global governance committee’, An Ifri – KDI joint paper, Paris (17 December 2010), p. 9.

8 Jakob Vestergaard, ‘The G20 and Beyond. Towards Effective Global Economic Governance’, Danish Institute for International Relations Report, Copenhagen (2011).

9 Cooper, Andrew F., ‘The G20 as an improvised crisis committee and/or a contested “steering committee” for the world’, International Affairs, 86:3 (2010), pp. 741–57CrossRefGoogle Scholar; Fidler, Stephen and Nicoll, Alexander, ‘Out of balance: The Fragile World Economy’, Survival, 52:6 (2010), p. 92CrossRefGoogle Scholar; Kirton, John, Larionova, Marina, and Savona, Paola (eds), Making Global Economic Governance Effective: Hard and Soft Law Institutions in a Crowded World (Farnham: Ashgate 2010)Google Scholar.

10 The Economist, ‘The G20: Talking-shop-on Thames’ (12 March 2009).

11 Castaneda, Jorge G., ‘Not Ready for Prime Time. Why Including Emerging Powers at the Helm Would Hurt Global Governance’, Foreign Affairs, 89:5 (2010)Google Scholar; Friedberg, Aaron L., ‘Implications of the Financial Crisis for the US-China Rivalry’, Survival, 52:4 (2010), pp. 3154CrossRefGoogle Scholar; Hart, Andrew F. and Jones, Bruce D., ‘How do Rising Powers Rise?’, Survival, 52:6 (2010), pp. 6388CrossRefGoogle Scholar; Twining, Daniel, As Asia Rises. How the West can Enlarge its Community Values and Interests in the Indo-Pacific Region (Washington DC: German Marshall Fund of the US, 2010)Google Scholar.

12 George Parker, Chris Giles and Edward Luce, ‘G20 Leaders Hail Crisis Fightback’, Financial Times (2 April 2009), available at: {http://www.ft.com/cms/s/0/082652de-1fb0-11de-a1df-00144feabdc0.html#axzz1KjyV8RzV}; Peer Steinbrück, ‘Die Krise als Zäsur’, speech, Karl-Schiller-Stiftung (21 April 2009), available at: {www.peer-steinbrueck.de/interviews_reden/reden/090421_karl_schiller_stiftung.html?pg=1} accessed 22 Nov. 2010.

13 Naazneen Barma, Ely Ratner, and Steven Weber, ‘A World Without the West’, The National Interest, July/August: 90 (2007), pp. 23–30; Ikenberry, John G., ‘The Rise of China and the Future of the West. Can the Liberal System Survive?’, Foreign Affairs, 87:1, Jan/Feb (2008), pp. 2337Google Scholar; Hachigian, Nina and Sutphen, Mona, ‘Strategic Collaboration: How the United States can Thrive as other Powers Rise’, The Washington Quarterly, 31:4 (2008), pp. 4357CrossRefGoogle Scholar.

14 Stewart, Patrick, ‘Irresponsible Stakeholders? The Difficulty of Integrating Rising Powers’, Foreign Affairs, 89:6 (2010)Google Scholar; Castaneda, ‘Not Ready for Prime Time’; Friedberg, ‘Implications’; Hart and Jones, ‘How do Rising Powers Rise?’; Twining, ‘As Asia rises’. For an overview of theoretical conceptions on emerging powers see Young, Alasdair R., ‘Perspectives on the Changing Global Distribution of Power: Concepts and Context’, Politics, 30:1 (2010), pp. 214CrossRefGoogle Scholar.

15 Woods, ‘Global Governance after the Financial Crisis’, p. 51.

16 Mark Beeson and Stephen Bell, ‘The G20 and the Politics of International Financial Sector Reform’, Robust Regimes or Hegemonic Instability?, Centre for the Study of Globalisation and Regionalism (CSGR) Working Paper 174/2005, University of Warwick; Eichengreen, Barry and Baldwin, Richard (eds), What G20 leaders must do to stabilize our economy and fix the financial system (London: Centre for Economic Policy Research, 2008)Google Scholar; Kirton, Larionova, and Savona, ‘Making Global Economic Governance’; Mattli, Walter and Woods, Ngaire, ‘In Whose Benefit? Explaining Regulatory Change in Global Politics’, in Mattli, Walter and Woods, Ngaire (eds), The Politics of Global Regulation (Princeton University Press, 2009), pp. 143Google Scholar.

17 Schirm, Stefan A., Globalization and the New Regionalism. Global Markets, Domestic Politics, and Regional Cooperation (Cambridge: Polity Press, 2002), pp. 3356Google Scholar; Schirm, Stefan A., ‘Ideas and Interests in Global Financial Governance. Comparing German and US Preference Formation’, Cambridge Review of International Affairs, 22:3 (2009), pp. 503–7CrossRefGoogle Scholar; Schirm, Stefan A., ‘Varieties of Strategies: Societal Influences on British and German Responses to the Global Economic Crisis’, Journal of Contemporary European Studies, 19:1 (2011), pp. 4851CrossRefGoogle Scholar.

18 For the theoretical background of the societal approach see Fioretos, Orfeo, ‘The Domestic Sources of Multilateral Preferences: Varieties of Capitalism in the European Community’, in Hall, Peter A. and Soskice, David (eds), Varieties of Capitalism (Oxford: Oxford University Press, 2001), pp. 213–44CrossRefGoogle Scholar; Frieden, Jeffrey and Rogowski, Ronald, ‘The impact of the international economy on national policies: an analytical overview’, in Keohane, Robert O. and Milner, Helen V. (eds), Internationalization and domestic politics (Cambridge University Press 1996), pp. 2547CrossRefGoogle Scholar; Katzenstein, Peter J., ‘Introduction: Domestic and International Forces and Strategies of Foreign Economic Policy’, in Katzenstein, Peter J. (ed.), Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States (Madison: University Wisconsin Press, 1978), pp. 322Google Scholar; Moravcsik, Andrew, ‘Taking Preferences Seriously: A Liberal Theory of International Politics’, International Organization, 51:4 (1997), pp. 513–53CrossRefGoogle Scholar; Putnam, Robert D., ‘Diplomacy and Domestic Politics: The Logic of Two Level Games’, International Organization, 42:3 (1988), pp. 427–60CrossRefGoogle Scholar; Seabrooke, Leonard, The Social Sources of Financial Power. Domestic Legitimacy and International Financial Orders (Ithaca: Cornell University Press, 2006), pp. 173–90Google Scholar.

19 Hall, Peter A. and Thelen, Kathleen, ‘Institutional Change in Varieties of Capitalism’, Socio-Economic Review, 7:1 (2009), pp. 27–8Google Scholar.

20 Blyth, Mark, Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century (Cambridge University Press, 2002), p. 251CrossRefGoogle Scholar.

21 Schirm, ‘Varieties of Strategies’, p. 49.

22 Andreas Nölke, ‘Transnational Economic Order and National Economic Institutions: Comparative Capitalism Meets International Political Economy’, MPIfG Paper (Cologne: Max Planck Institute for the Study of Societies, 2011).

23 Frieden and Rogowski, ‘The impact of the international economy’, p. 35.

24 See Schirm, Globalization; Schirm, ‘Ideas and Interests’.

25 Helleiner, Eric and Pagliari, Stefano, ‘The End of an Era in International Financial Regulation? A Postcrisis Research Agenda’, International Organization, 65 (Winter 2010/11), p. 182Google Scholar.

26 On the characteristics of LMEs and CMEs see Hall, Peter A. and Soskice, David, ‘An Introduction to Varieties of Capitalism’, in Hall, Peter A. and Soskice, David (eds), Varieties of Capitalism, The Institutional Foundations of Comparative Advantages (Oxford University Press 2001), pp. 168CrossRefGoogle Scholar; on SMEs see Nölke, Andreas, ‘A BRIC’ – variety of capitalism and social inequality: The case of Brazil‘, Revista de Estudos e Pesquisas sobre as Américas, 4:1 (2010), pp. 114CrossRefGoogle Scholar.

27 OECD (Organisation for Economic Cooperation and Development), ‘Policy Responses to the Economic Crisis: Investing in Innovation for Long-Term Growth’ (Paris, 2009), pp. 18–19.

28 Eswar Prasad and Isaac Sorkin, Assessing the G-20 Stimulus Plans: A Deeper Look, Brooking Institution, Washington DC (March 2009), available at: {www.brookings.edu/articles/2009/03_g20_stimulus_prasad.aspx?p=1}.

29 Overseas Development Institute, The G20 in 2010: Cementing the BRICKs of development, Policy Brief, London (May 2010); Patrick, Stewart, The G20 and the United States: Opportunities for More Effective Multilateralism, A Century Foundation Report, New York (2010), available at: {http://tcf.org/publications/2010/10/the-g20-and-the-united-states-opportunities-for-more-effective-multilateralism}.

30 ILO (International Labour Organisation), G20 Statistical Update: United States‘ Response to the Crisis (2010), available at: {http://www.ilo.org/public/libdoc/jobcrisis/download/g20_unitedstates_countrybrief.pdf}.

31 The Economist (24 September 2011), p. 92.

32 Barry Z. Cynamon and Steven M. Fazzari, ‘The End of the Consumer Age’, working paper Washington University St. Louis 2010, available at: {http://www.artsci.wustl.edu/~ec448sf/Cyn_Fazz_Cons.pdf}; Rajan, Rahguram G., ‘Rebalancing the Global Economy’, New Perspectives Quarterly, 27:4 (2010), pp. 79CrossRefGoogle Scholar; Morgan, Glenn, ‘Discussion forum: Global financial architecture and national capitalisms’, Socio-Economic Review, 9:3 (2011), p. 593Google Scholar.

33 Pfau-Effinger, Birgit, ‘Culture and Welfare State Politics: Reflections on a Complex Interrelation’, Journal of Social Policy, 34:1 (2005), p. 11CrossRefGoogle Scholar.

34 OECD, Household Saving Rates – OECD Economic Outlook No. 88 (2010), available at: {http://dx.doi.org/10.1787/2074384X-2010-table7}.

35 ILO, ‘G20 Statistical Update: Germany's Response to the Crisis’ (2010), available at: {http://www.ilo.org/public/libdoc/jobcrisis/download/g20_germany_countrybrief.pdf}; Schirm, ‘Varieties of Strategies’ (2011), p. 56.

36 World Values Survey (WVS), Values Survey Databank, V152 Democracy: Governments tax the rich and subsidise the poor, data from 2006, available at: {www.wvsevsdb.com} accessed 5 Dec. 2011.

37 Hartwich, Hans-Hermann, Die Europäisierung des deutschen Wirtschaftssystems. Alte Fundamente, neue Realitäten, Zukunftsperspektiven (Opladen: Leske & Budrich, 1998), p. 67CrossRefGoogle Scholar.

38 Schmidt, Manfred G., ‘Still on the middle way. Germany's economy at the beginning of the twenty-first century’, German Politics 10:3 (2001), pp. 12CrossRefGoogle Scholar.

39 ILO, ‘G20 Statistical Update: Brazil’ Response to the Crisis (2010), available at: {http://www.ilo.org/public/libdoc/jobcrisis/download/g20_brazil_countrybrief.pdf}.

40 The Economist, ‘Flying too high for safety’ (20 May 2010), available at: {www.economist.com/node/16167612/print}.

41 World Values Survey (WVS), Values Survey Databank, V118 Government Responsibility, data from 2006, available at: {www.wvsevsdb.com} accessed 5 Dec. 2011.

42 Imai, Jane, ‘Seeds of Change in a Deep-Rooted Society: Poverty Reduction in Brazil under President Lula’, International Affairs Review, 17:2 (2008), available at: {http://iar-gwu.org/node/41}Google Scholar.

43 Antonio Lavareda, ‘Crise e Opiniao Publica. Percepcoes sobre o Enfrentamento da Crise no Brasil’, presentation delivered at: Fundacao Getulio Vargas, Impacto da Crise na Gestao Governamental, Sao Paulo (2009), available at: {http://www.fgv.br/fgvprojetos/Arq/controle_arq/122.pdf}.

44 For the data on the US and Germany see Guonan Ma and Wang Yi (2010), ‘Chinas high savings rate: myth and reality, Bank for International Settlements, BIS WP no. 312, Geneva’. For the data on Brazil see Dennis Tao Yang, Junsen Zhang and Shaojie Zhon ‘Why are Saving Rates so High in China? NBER Papers no. 16771 (2011), available at: {www.nber.org/papers/w16771.pdf}. Also see OECD, Household Saving Rates – OECD Economic Outlook No. 88 (2010), available at: {http://dx.doi.org/10.1787/2074384X-2010-table7}.

45 Quoted in The Economist, ‘The G20: Talking-shop-on Thames’.

46 Timothy Geithner, ‘Timothy Geithner's letter to G20 finance leaders’, The Guardian (22 October 2010), available at: {http://www.guardian.co.uk/business/2010/oct/22/g20-timothy-geithner-letter} accessed 31 Oct. 2011.

47 Handelsblatt (16 June 2009).

48 Geithner quoted in Glenn Somerville, ‘Geithner: need stimulus, not financial transactions tax’, Reuters (8 November 2009), {http://www.reuters.com/assets/print?aid=USTRE5A611320091108}.

49 Angela Merkel, ‘Regierungserklärung von Bundeskanzlerin Merkel zum EU-Gipfel in Brüssel und zum Gipfel der G20-Staaten’, Seoul (27 October 2010), available at: {http://bundeskanzlerin.de/Content/DE/Regierungserklaerung/2010/2010-10-27-merkel-regerklaerung-eu-g20.html}.

50 The Economist, ‘The ghost at the feast’ (12 November 2010).

51 Mantega quoted in Joshua Goldman and Camila Fontana, ‘Brazil to Hold Off on Stimulus Plans, Meirelles Says’, Bloomberg (9 November 2009), {www.bloomberg.com/apps/news?pid=21070001&sid=aaR01tExFS9g}.

52 Dilma Rousseff, ‘Brazil will fight back against the currency manipulators’, Financial Times (21 September 2011).

53 Geithner, Timothy, ‘Treasury Secretary Geithner's Testimony on China’, Wall Street Journal (16 September 2010), available at: {http://blogs.wsj.com/economics/2010/09/16/treasury-secretary-geithners-testimony-on-china}Google Scholar.

54 Quoted in Financial Times, ‘Geithner speech on global recovery, Remarks at the Brookings Institution’ (6 October 2010), available at: {http://cachef.ft.com/cms/s/0/140133a0-d14b-11df-8422-00144feabdc0.html#axzz1NUyUJAPU}.

55 Quoted in BBC News (9 January 2011), available at: {www.bbc.co.uk/news/business-12148841?print=true}; The Economist (2011), p. 67.

56 Quoted in John P. Rathbone and Jonathan Wheatley, ‘Brazil ready to retaliate for US move in currency war’, Financial Times (4 November 2010).

57 Rousseff, ‘Brazil will fight back’.

58 Paris, Costas and Kong, Kanga, ‘India, Brazil to Press China on Yuan’, Wall Street Journal, (18 February 2011), available at: {http://online.wsj.com/article/SB10001424052748704900004576151972899632918.html}Google Scholar.

59 Angela Merkel, Regierungserklärung von Bundeskanzlerin Merkel zum EU-Gipfel in Brüssel und zum Gipfel der G20-Staaten, Seoul (27 October 2010), available at: {http://bundeskanzlerin.de/Content/DE/Regierungserklaerung/2010/2010-10-27-merkel-regerklaerung-eu-g20.html} accessed 22 July 2011.

60 Quoted in The Economist, ‘The ghost at the feast’ (12 November 2010).

61 Geithner, ‘Testimony on China’.

62 US Chamber of Commerce, International Trade and Investment: Policy Accomplishments for 2011, Washington, DC (2011), available at: {http://www.uschamber.com/issues/accomplishments/international-trade-and-investment} accessed 31 Oct. 2011.

63 Die Welt, Unternehmen fürchten den Währungskrieg (7 October 2011), available at: {http://www.welt.de/print/die_welt/wirtschaft/article10123894/Unternehmen-fuerchten-den-Waehrungskrieg.html} accessed 31 Oct. 2011); Deutscher Industrie- und Handelskammertag (DIHK), Spiel‘s noch einmal Sam – G20 wieder gefordert, Newsletter no. 42 (27 October 2011), available at: {http://www.dihk.de/presse/thema-der-woche} accessed 31 Oct. 2011; DIHK, ‘Das Spiel mit Wechselkursen birgt Gefahren’, Interview with DIHK President Hans Heinrich Driftmann in manager magazine (13 Oct, 2010), available at: {http://www.dihk.de/presse/meldungen/meldung012889} accessed 31 Oct. 2011.

64 Federacao das Industrias do Estado de Sao Paulo (FIESP), ‘Diretor da Fiesp defende rodada da moeda no G20 papa evitar maior deterioracao do cambio’, press release (14 October 2011), available at: {www.fiesp.com.br/agencianoticias/2011/10/14/diretor-fiesp-rodada-moeda-g20-cambio.ntc}.

65 MercoPress, ‘Brazilian exporters ask Rousseff for a US dollar between 2 and 2.2. Real’ (8 November 2010), available at: {http://en.mercopress.com/2010/11/08/brazilian-exporters-ask-rousseff-for-a-us-dollar-between-2-and-2.2-real}.

66 Geithner, ‘Testimony on China’.

67 Schäuble quoted in Wallstreet-online (2010), available at: {http://www.wallstreet-online.de/nachricht/3103933-vor-g20-treffen-schaeuble-gegen-export-vorgaben}.

68 Angela Merkel, ‘G8 – Sicherheitstests für alle Kernkraftwerke’, press release at official web-site of the German Chancellor (27 May 2011), available at: {http://www.bundeskanzlerin.de/nn_683580/Content/DE/Artikel/2011/05/2011-05-26-g8.html}.

69 The Economist, ‘Beyond Bretton Woods 2’ (6 November 2010), p. 85.

70 Rousseff, ‘Brazil will fight back’.

71 G20, ‘Communique’, Meeting of Finance Ministers and Central Bank Governors, Washington, DC (14 April 2011), available at: {http://www.g20.org/Documents2011/04/G20%20Washington%2014-15%20April%202011%20-%20final%20communique.pdf}; Ralph Atkins and Quentin Peel, ‘G20 strikes compromise on global imbalances’, Financial Times (19 February 2011).

72 Rathbone and Wheatley, ‘Brazil ready to retaliate’; The Economist, ‘Emerging markets. One more such victory’ (1 October 2011), p. 67.

73 Angela Merkel, ‘Rede von Bundeskanzlerin Angela Merkel anlässlich des BDI-Tags der deutschen Industrie’ (27 September 2011), speech on the offical web-site of the Chancellor at: {http://www.bundeskanzlerin.de/nn_683608/Content/DE/Rede/2011/09/2011-09-27-bkin-bdi.html}.

74 Schirm, ‘Leaders in Need of Followers’, pp. 198–201.