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Arthur Stein
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UCLA

 

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[As posted at Rising BRICSAM. Note that the blog title was provided by the Rising BRICSAM host.]

The Colin Bradford piece in FP, “Seven New Laws of the G-20 Era”, Dan Drezner’s blog comment, “Learning to Embrace the Policy Deadlocks” and then Bradford’s rebuttal – again in FP – “Don’t Judge the G-20 by Its Summits,” and finally the Alexandroff retort in Rising BRICSAM “Punching Below Its Weight” strike me as eliding the crucial issue: is disagreement in a broader venue such as the G20 a problem for global governance, and especially economic governance?

The original Bradford piece argued that disagreement is not so bad. The G20 should not be judged by outcomes but as constituting a process and one that was broader and more diverse. The argument contains a core implicit argument – one never articulated, much less examined and substantiated. More on this below.

Drezner’s critique was largely focused on mass public reactions to G20 disagreements. Interesting, but tangential at best. Mass reaction would presumably be secondary to the concrete consequences of such disagreements.

The Alexandroff reaction to the Bradford-Drezner exchange is to focus on “effectiveness”, and this gets closest to the heart of the matter. He notes that disagreement is a feature of the G7/8 as well. Even the small number G set exhibits all kinds of “varieties of capitalism”: more or less corporatism; larger and smaller welfare states; more or less industrial policy. A substantial variety of types existed/exist even in that small club.

The core issue, then, is whether for the G8 or the G20 disagreement and divergence over policy options are preferable to agreement, coordination, and a concerted response. There is a small literature among economists about whether macroeconomic policy coordination makes things better or worse. Implicit in Bradford’s argument is that disagreement and its policy consequences are not so bad and, implicitly, to be preferred to agreement between a less diverse set of actors. Perhaps. But what is the evidence? Is that true for every policy? From the perspective of one of the world’s largest economies – California – dysfunctional politics does not seem so great. 

All this reminds me of the argument about whether market failure or government failure is worse. Government action is often encouraged to deal with market failure. But government failure is also a problem. Is government failure a problem in global economic governance? Is the failure to coordinate and sustained disagreement preferable? That was certainly the argument of states that wanted to impose capital controls and thought the Washington consensus was wrong and that they should be free to experiment with a different policy. The acceptance of policy divergence and experimentation did mean that the experience of the global financial crisis of 2008 was not same everywhere.

So, whether the G20 works or not depends on: the issue, and what is required to deal with the particular problem.

1) It will depend on the nature of the disagreements, whether they are fundamental (about the desirability of markets), substantive (about how to deal with a specific problem), or distributional (about how to allocate the costs).

2) It will depend on how the parties respond to disagreement. Will the response be 20 separate uncoordinated responses to problems? Will the response to disagreement among the 20 be to form smaller clubs of agreement, say a G7 and a G13 set of separate responses but coordinated within each subset?

3) It will depend on time and the consequences of delay. One proposition: the larger the group the greater must be the crisis to generate a consensus response, and the greater the delay in responding to crises. The consequences of delay are also likely to vary. Note the national responses undertaken before the first G20 meeting was even held.

In short, the commentaries and blog posts are correctives. Yes, a stampede of lemmings is undesirable. Yes, disagreements can lead to better policy. There is an argument known in business schools as the “Abilene paradox” about the consequences of “mismanaged agreement” (the international relations literature refers to this as “groupthink”). So we should not respond in despair to disagreement. After all, bargaining occurs in situations of disagreement and it takes time to arrive at bargaining solutions, and initial disagreement and even stalemate do not preclude eventual agreement. But sometimes, available bargains are not struck and the even when they are, the costs of delay are enormous. Few international conferences result in an agreement at the first meeting and in immediate resolutions to problems. Yet many international conferences have resulted in breakdown, a failure to deal with underlying issues, and, in the national security sphere, as precursors to war.

One’s view of the consequences of disagreement will thus depend on one’s answer to some of the questions posed above and to the specific issues and experiences (not surprisingly, Pacific island nations fearing their disappearance have been the ones most urgently pressing for responses to global warming).

And a comparison with historical assessments of other institutions should make us wary both of snap judgments or even generic views. Think of NATO, and all the times people decried its disagreements, the problems in obtaining consensus, and the divergent assessments depending on the issue. I would guess the G- 20 will look no different, assuming it has some successes.

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