UNDP Report: New Governance Trends

2.2.2 From the G8 to the G20 - Building a Formal Setting for the Inclusion of Emerging Economies

The first platform that officially recognized the power shift from developed to emerging economies was evolution from the original G7 to the G20, finally established in the aftermath of the 2008-09 financial crisis. The first ministerial level G20 was created in 1999 to "establish a new mechanism for informal dialogue in the framework of the Bretton Woods institutional system, to broaden the dialogue on key economic and financial policy issues among systemically significant economies and promote cooperation to achieve stable and sustainable world economic growth that benefits all."

In reality, this ministerial level G20 was more focused on G7 decisions. It did not provide a wholly effective forum for discussion on issues that were of primary interest to developing countries. From 2003, these countries started promoting the so-called "Outreach 5": China, Mexico, India, Brazil and South Africa, which signaled the establishment of the "G8+5."

The Pittsburgh Summit in 2009 named the G20 as the "premier forum for international economic cooperation", making a formal shift from the G8 to the G20. The former WTO Director General Pascal Lamy stated that "global governance [was] forming a new triangle shape." That is to say, the G20 would now provide political leadership and strategic guidance, specific international institutions would provide rules and guide implementation, and the UN would provide a legitimate and accountable platform for cooperation.

However, the G20 is still far from perfect. There have been doubts as to whether the G20 can successfully transform itself from a "crisis committee" to a long-term steering committee for the world economy. Other criticisms have focused on the legitimacy of the G20, especially as it is often seen as a self-appointed forum working to manage global economic governance. Concerns have also been expressed about the weakness of the G20 as an informal network and for its lack of strong leadership.

Moreover, some point out how the G20 represents a bridging platform that is able to bring developed and developing economies together to push for global leadership that embraces the needs of countries that are not represented by the platform. It represents a leadership that works "on behalf of the whole and not narrowly based on the interests of the major economies."