From G7 to G8: Introduction

From G7 To G8:
Evolution, Role and Documentation of a Unique Institution

Peter I. Hajnal

April 1998

Introduction: The G7's Role in Global Governance

John J. Kirton

As the next millennium approaches, the international community faces the fundamental challenge of devising at the global level mechanisms for governance to reinforce, and at times replace, those that have operated effectively for several centuries at the national level. The end of the cold war has substantially eliminated a world divided among a democratic west, communist east and non-aligned south, highlighted a host of new transnational, human security priorities and led to the demise of the self-contained "national security" state. The advent of globalization in finance, investment, trade, production and communication has led many national economies to be integrated into a single global economy, whose healthy functioning is increasingly vital to the well being of citizens even in large, advanced industrial economies such as the United States and Japan. Finally, new openness and technology have meant that many issues once dealt with primarily as a part of domestic politics - supervising banking systems, protecting the environment, combating organized crime, drugs and disease, ensuring nuclear safety, and creating employment, have now come to require collective international action for their effective accomplishment

The task of shaping the global governance arrangements for this new era has largely fallen to the G7. This Group of Seven advanced industrial economies was founded in 1975 by the France, the United States, Britain, Germany, Japan, Italy, added Canada and the European Community (now Union) shortly after, and in 1998 admitted Russia as a virtually full member of a renamed G8 club. Then, as now, its raison d'e~tre is to provide collective global leadership for a world which the United States alone is no longer able or willing to direct, and where the entrenched system of international institutions generated by World War two and the Cold War - the United Nations and Atlantic galaxies respectively - have been slow to adapt At times the G7 has provided the critical catalyst to reinforce and redirect the purposes and activities of these institutions, from the IMF and World Bank, to the GATT and WTO, the International Atomic Energy Agency, the International Civil Aviation Organization, NATO, the International Energy Agency and the OECD. Since 1994 the G7 has mounted a major program of international institutional reform, designed to modernize this half-century old multilateral edifice to meet the needs of the twenty-first century. And increasingly, the G7 has found it necessary to create its own institutions, at the political and officials levels, to respond to the challenges of a rapidly transforming world. As the new millennium approaches, this permanent, now deeply entrenched and expanding system of G7/G8 institutions is rapidly emerging as an effective center of global governance.

The flourishing of the system is seen in the expansion during the 1990's of the G7/G8's participant inclusiveness, policy breadth, institutional depth, domestic engagement, and effectiveness in generating international c~operation and national compliance. Since its inception the G7 has been the exclusive club to which all and only the world's major market democracies have been admitted, assisted since 1977 by the European Community, now Union, as the international organization representing the democratic market middle powers of Europe. The past decade has seen the virtually full incorporation of a now democratic Russia, and the emergence of an institutionalized dialogue, through various formulae, with leading developing and transition countries and the world's major multilateral economic and political organizations. Although concerns about the G7/G8's legitimacy and representativeness remain, and calls for the inclusion of China, India and others are compounding, it will be some time before a compelling logic arises and workable formula is found to expand the existing G8 club.

Since the start, the G7 has been both an economic and a political institution, linking economic and political concerns on its agenda as only leaders can to counter the initial immediate threat of stagflation and the crisis of governability, and to fulfill the G7's long term mission of spreading the market

democracy model throughout the world. Thus the agenda of the 1970's, led by finance and trade, included terrorism and east-west economic relations, while that of the 1980's, dominated by east-west and regional security issues, also made major advances in development and trade. The Summits of the 1990's have retained this duality, but have also added a much broader array of subject employment, crime, health, education, and the environment. Such subjects involve once domestic matters, a new array of global or transnational issues and the challenge of international institutional redesign. Although many call for the G7 to return to its putative economic roots, or to select only a few themes for the leader to focus on each year, the centrality of the C7 in the post cold war, globalizing world of the 1990's means that this ever-expanding, full strength, increasingly domestic agenda is here to stay.

New subjects have called for new institutional capacity, and the G7 has responded by reinforcing its annual meeting of leaders with a growing array of subject specific ministerial bodies and official level working groups. Thus, at the ministerial level, the 1980's added stand-alone G7 forums for trade, foreign affairs and finance, while the 1990's added those for such domestic subjects as the environment, employment, information, terrorism and, prospectively, crime. The proliferation of G7 working groups, at times expanding to embrace other countries, further demonstrates the importance of active G7 leadership in

addressing the emerging issues of the new era. As these bodies have come to directly involve the ministers and officials of a majority of government departments across the G7 governments, the G7 is quickly becoming an international center of domestic governance.

Such institutional growth and innovation has allowed the G7 to become increasingly effective, not only in its basic functions of allowing leaders time for creative deliberation and collectively setting directions for the global community, but also in proactive international c~operation. Despite some false starts and disappointments, the G7's c~operative achievements of the 1990's include major steps forward in democratic and market reform in Russia, multilateral trade liberalization, sustainable development, international institutional reform, and regional security. And while many feel that promises made at the Summit are quickly forgotten once the leaders return home, the evidence suggests that members' compliance with their G7 commitments have increased during the 1990's. While there is much more that can be done to reform the Summit to ensure even greater performance, and to shape the global order in desired directions, there is a firm foundation of effectiveness on which to build.

All of these central features of the G7 as a central system of global governance are contested, both in the scholarly world of hard analysis and

amongst policymakers seeking to mobilize and change the G7 system for their particular purposes. These competing analyses and prescriptions, together with the visible proliferation of the G7 system, the demands on it, and its accomplishments underscore the need for a serious, balanced, in depth consideration of the G7 in all its many dimensions. Moreover, such consideration must be informed by a systematic, reliable and thorough understanding of the features of a complex system of international governance that is largely and deliberately invisible, and that surfaces for public view only at rare intervals when the leader and ministers present it in the image they desire. It is this critically important balanced analysis and foundation of information that this study provides.