The G-7 as a global "ginger group": Plurilateralism and four-dimensional diplomacy

Global Governance

Volumn 6, Issue 2, 2000, Pages 165-189

  Baker, Andrew ^a  

^a NONE

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EID: 0034164774     PISSN: 10752846     EISSN: None     Source Type: Journal    
DOI: 10.1163/19426720-00602002     Document Type: Review

References (70)

1. The notable exception is Robert Putnam and Nicholas Bayne, Hanging Together: Co-operation and Conflict in the Seven Power Summits (London: Sage, 1987). This focused on the annual G-7 summits (now G-8). At about the time the second edition appeared, the summits began to disengage from exchange rate and international financial and macroeconomic issues, and the finance ministers and central bankers' process became more prominent. On the finance ministers' process, see Yoichi Funabashi, Managing the Dollar: From the Plaza to the Louvre (Washington, D.C.: Institute for International Economics, 1989); Wendy Dobson, Economic Policy Co-ordination: Requiem or Prologue (Washington, D.C.: Institute for International Economics, 1991); Fred Bergsten and Randall Henning, Global Economic Leadership and the Group of Seven (Washington, D.C.: Institute for International Economics, 1996).
2. The notable exception is Robert Putnam and Nicholas Bayne, Hanging Together: Co-operation and Conflict in the Seven Power Summits (London: Sage, 1987). This focused on the annual G-7 summits (now G-8). At about the time the second edition appeared, the summits began to disengage from exchange rate and international financial and macroeconomic issues, and the finance ministers and central bankers' process became more prominent. On the finance ministers' process, see Yoichi Funabashi, Managing the Dollar: From the Plaza to the Louvre (Washington, D.C.: Institute for International Economics, 1989); Wendy Dobson, Economic Policy Co-ordination: Requiem or Prologue (Washington, D.C.: Institute for International Economics, 1991); Fred Bergsten and Randall Henning, Global Economic Leadership and the Group of Seven (Washington, D.C.: Institute for International Economics, 1996).
3. The notable exception is Robert Putnam and Nicholas Bayne, Hanging Together: Co-operation and Conflict in the Seven Power Summits (London: Sage, 1987). This focused on the annual G-7 summits (now G-8). At about the time the second edition appeared, the summits began to disengage from exchange rate and international financial and macroeconomic issues, and the finance ministers and central bankers' process became more prominent. On the finance ministers' process, see Yoichi Funabashi, Managing the Dollar: From the Plaza to the Louvre (Washington, D.C.: Institute for International Economics, 1989); Wendy Dobson, Economic Policy Co-ordination: Requiem or Prologue (Washington, D.C.: Institute for International Economics, 1991); Fred Bergsten and Randall Henning, Global Economic Leadership and the Group of Seven (Washington, D.C.: Institute for International Economics, 1996).
4. The notable exception is Robert Putnam and Nicholas Bayne, Hanging Together: Co-operation and Conflict in the Seven Power Summits (London: Sage, 1987). This focused on the annual G-7 summits (now G-8). At about the time the second edition appeared, the summits began to disengage from exchange rate and international financial and macroeconomic issues, and the finance ministers and central bankers' process became more prominent. On the finance ministers' process, see Yoichi Funabashi, Managing the Dollar: From the Plaza to the Louvre (Washington, D.C.: Institute for International Economics, 1989); Wendy Dobson, Economic Policy Co-ordination: Requiem or Prologue (Washington, D.C.: Institute for International Economics, 1991); Fred Bergsten and Randall Henning, Global Economic Leadership and the Group of Seven (Washington, D.C.: Institute for International Economics, 1996).
5. Stephen Gill has argued that the G-7 sits at the apex of an ongoing and differentiated process of neoliberal international policy formation, creating a powerful G-7 nexus. See Stephen Gill, "European Governance and New Constitutionalism: Economic and Monetary Union and Alternatives to Disciplinary Neoliberalism in Europe," New Political Economy 3, no. 1 (1998): 5-26.
6. Debt issues have been considered largely as a subissue by the G-7, separate from monetary, financial, and exchange rate issues. For most of the 1990s, there was no consensus on the basic approach. Therefore, I do not directly consider debt issues in this article.
7. See, for example, Susan Strange, The Retreat of the State: The Diffusion of Power in the World Economy (Cambridge: Cambridge University Press, 1996); Philip Cerny, "Globalization and Other Stories: The Search for a New Paradigm for International Relations Theory," International Journal (autumn 1996): 618-637.
8. See, for example, Susan Strange, The Retreat of the State: The Diffusion of Power in the World Economy (Cambridge: Cambridge University Press, 1996); Philip Cerny, "Globalization and Other Stories: The Search for a New Paradigm for International Relations Theory," International Journal (autumn 1996): 618-637.
9. Jeffrey Frieden, "Invested Interests: The Politics of National Economic Policies in a World of Global Finance," International Organization 45, no.4 (autumn 1991): 427-433; Jonathan Moses, "Abdication from National Policy Autonomy: What's Left to Leave," Politics and Society 22, no. 2 (June 1994): 125-148.
10. Jeffrey Frieden, "Invested Interests: The Politics of National Economic Policies in a World of Global Finance," International Organization 45, no.4 (autumn 1991): 427-433; Jonathan Moses, "Abdication from National Policy Autonomy: What's Left to Leave," Politics and Society 22, no. 2 (June 1994): 125-148.
11. Philip Cerny, "Plurilateralism: Structural Differentiation and Functional Conflict in the Post Cold War World," Millennium: Journal of International Studies 22 (spring 1993): 27-51.
12. Richard Higgot and Simon Reich, "Intellectual Order for the Global Order: Non State Actors and Authority in the Global System," paper presented at the conference "Non State Actors and Authority in the Global System," ESRC Center for the Study of Globalisation and Regionalisation, University of Warwick, England, 31 October-1 November 1997.
13. Robert Cox, "Multilateralim and World Order," Review of International Studies 18 (1992): 165.
14. Susan Strange, States and Markets: An Introduction to International Political Economy (London: Pinter, 1994); Geoffrey Underhill, "Conceptualizing the Changing Global Order," in Richard Stubbs and Geoffrey Underhill, eds., Political Economy and the Changing Global Order, 2d ed. (Don Mills, Ont.: Oxford University Press, 2000).
15. Susan Strange, States and Markets: An Introduction to International Political Economy (London: Pinter, 1994); Geoffrey Underhill, "Conceptualizing the Changing Global Order," in Richard Stubbs and Geoffrey Underhill, eds., Political Economy and the Changing Global Order, 2d ed. (Don Mills, Ont.: Oxford University Press, 2000).
16. See, for example, Alexander Wendt, "Collective Identity Formation and the International State," American Political Science Review 88, no. 2 (June 1994): 384-396.
17. Anthony Giddens, A Profile and Critiques in Social Theory (London: Macmillian, 1982), chap. 6. This is least applicable to what I refer to in this article as fourth-dimensional diplomacy. Multilateral institutions, transnational policy communities, and emerging market authorities do not speak with the same voice. As far as the G-7 countries are concerned, however, this is the least developed form of diplomacy. The aim is to get emerging markets to follow IMF, Basel Committee prescriptions. In other words, the G-7 partners are using multilateral institutions and transnational policy communities as intermediaries in an effort to export and extend their own belief system. At the same time, emerging markets often use multilateral institutions such as the IMF or World Bank to express a difference of opinion or oppose a G-7 policy stance. The resulting political struggles constitute a form of fourth-dimensional diplomacy in which the G-7, with some notable exceptions, usually prevails. A fifth dimension of diplomacy would entail a dialogue with social movements that are predominantly transnational, campaigning on transnational social issues, and engaging in political activities that are principally cross-border or international, such as Greenpeace, Friends of the Earth, Christian Aid, or Jubilee 2000. However, this dialogue is so underdeveloped that the G-7 finance ministers and central bankers have barely seemed aware of the existence of these groups or their views. On the whole, the groups have been ignored, although a Jubilee 2000 petition did draw a response from the leaders at the Birmingham G-8 summit in 1998.
18. John Kirton and Ella Kokotsis, "Revitalizing the G-7: Prospects for the Birmingham Summit of the Eight," International Journal (winter 1997-1998): 38-56.
19. The finance ministers and central bankers' process is distinct from but linked to the annual G-8 leaders' summit. Since the Birmingham summit of 1998, the finance ministers have met the week before the summit and provided a report for the leaders on their ongoing activities. The main link with the summit process is through the financial "sous-sherpa," who also acts as the G-7 deputy's deputy in preparations for finance ministers and central bankers' meetings in most G-7 countries, as well as providing briefings for the summit through the summit "sherpa."
20. Nigel Wicks, "G-7 Co-ordination: An Empty Box?" speech by British G-7 finance ministry deputy to the Bank of England's Development Course, London Business School, 1 September 1994.
21. U.S. deputy Larry Summers, quoted in Darrell Delamaide, "The Coming Age of G-7," Euromoney (September 1993): 71.
22. John Ruggie, "Multilateralism: An Anatomy of an Institution," International Organization 46, no. 3 (summer 1992): 568.
23. Robert Putnam, "Diplomacy and Domestic Politics: The Logic of Two Level Games," International Organization 42, no. 3 (summer 1988): 427-460.
24. It should be noted, however, that this was never evident in the way Putnam used the term.
25. Robert Cox, "Globalization, Multilateralism and Democracy," John W. Holmes Memorial Lecture, annual meeting of the Academic Council of the United Nations System, Washington, D.C., 1992.
26. Henry Wallich, "Institutional Co-operation in the World Economy," in J. Frankel et al., eds., The World Economic System: Performance and Prospects (Dover, Mass.: Auburn House, 1984), p. 85.
27. Wicks, "G-7 Co-ordination."
28. Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton: Princeton University Press, 1984).
29. Lawrence Summers, "In Defense of the G-7," The International Economy (July-August 1996): 57.
30. Robert Keohane and Joseph Nye, "Transgovernmental Relations and World Politics," World Politics 27, no. 1 (October 1974): 39-62.
31. Nigel Lawson, The View from No. 11: Memoires of a Tory Radical (London: Bantam Press, 1992).
32. A British official interviewed in confidence by the author in London, 7 July 1998, used the phrase. The designation plc refers to private limited companies.
33. Asymmetries of power continue to characterize the G-7 process. This is most obvious in the way the dollar's reserve currency status gives the United States most influence. This was evident in 1995-1996. The Clinton administration used the G-7 process to pursue a high-dollar policy ahead of presidential elections. An appreciation of the dollar promoted by the Treasury Department prevented the Federal Reserve from raising interest rates and contributed to Clinton's reelection in 1996.
34. Funabashi, Managing the Dollar.
35. On the notion of collective identity in international relations, see Wendt, "Collective Identity Formation and the International State."
36. Sir Geoff Littler, quoted in Dobson, Economic Policy Co-ordination, p. 4.
37. "G-7 Moves Towards Concerted Interest Rate Cut," Guardian, 15 September 1998, p. 1. Federal Reserve chairman Alan Greenspan and Bundesbank president Hans Tietemeyer rebutted these suggestions in the days following the London meeting.
38. Cerny, "Plurilateralism," p. 46.
39. Jonathan Moses, "Trojan Horses: Putnam, ECU Linkage and the EU Ambitions of Nordic Elites," Review of International Political Economy 4, no. 2 (summer 1997): 382-415.
40. This development mirrors domestic developments as central banks are given increasing capacity to determine domestic monetary policy independently of government, while the capacity of finance ministries to police domestic public expenditure processes is enhanced by the establishment of fiscal rules.
41. Confidential interviews conducted by the author in Washington, D.C., and London, 1997-1998.
42. Andrew Baker, "Nébuleuse and the 'Internationalization of the State' in the U.K.? The Case of HM Treasury and the Bank of England," Review of International Political Economy 6, no. 1 (1999): 79-100.
43. Confidential interviews conducted by the author with officials, London and Washington, D.C., 1997-1998.
44. Putnam, "Diplomacy and Domestic Politics," p. 449.
45. Michael Artis and Sylvia Ostry, International Economic Policy Co-ordination, Chatham House Papers No. 30 (London: Routledge & Kegan Paul, 1986).
46. The episode also illustrated the power-dependent nature of much contemporary mutilateral diplomacy and in this case the potential for the State Department and the president to continue to intervene and impose their will in areas where the Treasury and the Federal Reserve generally enjoy a growing ascendancy.
47. Cerny, "Plurilateralism," p. 45.
48. Summers, quoted in Delamaide, "The Coming Age of G-7."
49. Point made by officials in confidential interviews conducted by the author, Washington, D.C., 9 February 1998.
50. Bergsten and Henning, Global Economic Leadership and the Group of Seven.
51. Point made repeatedly by officials in confidential interviews conducted by the author, London and Washington, D.C., 1997-1998.
52. Rubin's use of this phrase in meetings and speeches was reported to the author by a U.S. Treasury official in a series of confidential interviews, Washington, D.C., February-April 1998.
53. Officials in confidential interviews conducted by the author, 1997-1998.
54. Geoffrey Underhill, "Keeping Governments Out of Politics: Transnational Securities Markets, Regulatory Co-operation and Political Legitimacy," Review of International Studies 21, no. 3 (July 1995): 251-278; official in confidential interview conducted by the author, February 1997.
55. Stanley Fischer, Capital Account Liberalization and the Role of the IMF (Washington, D.C.: IMF, 1997).
56. This is something even the United States has been willing to accept in principle since at least 1996. For example, see Lawrence Summers, "U.S. Policy Towards the International Monetary System on the Eve of the Lyon Summit," speech to Emerging Markets Traders Association, June 1996.
57. Group of Ten, "The Resolution of Sovereign Liquidity Crises," A Report to the Ministers and Governors, Under the Auspices of the Deputies, May 1996.
58. Confidential interview with the author, Washington, D.C., 20 February 1998.
59. Ibid.
60. Summers, "U.S. Policy Towards the International Monetary System on the Eve of the Lyon Summit."
61. Confidential interview with the author, Washington, D.C., 9 February 1998.
62. The G-22 has since been disbanded.
63. Kirton and Kokotsis, "Revitalizing the G-7."
64. John Kirton, "What Future for the Summits?" concluding comments at "Jobs Crime and Money: Challenges for the G8 Summit in 1998," conference organized by the London School of Economics, University of Toronto G-8 Research Group, and Clifford Chance, at the Plaisterers' Hall, London, 13 May 1998.
65. Michael Hodges, "What Future for the Summits?" ibid.
66. James Rosenau, "Governance in the Twenty-first Century," Global Governance 1, no. 1 (winter 1995): 16.
67. Cerny, "Plurilateralism," p. 45.
68. Stephen Gill, "Global Finance, Monetary Policy and Co-operation Among the Group of Seven 1944-92," in Philip Cerny, ed., Finance and World Politics: Markets, Regimes and States in the Post-Hegemonic Era (Aldershot: Edward Elgar), p. 102.
69. Alain Minc, Le nouveau Moyen Âge (Paris: Gaillimard, 1993).
70. Strange, The Retreat of the State, chap. 12.