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Stiftung Wissenschaft und Politik German Institute for International and Security Affairs

The Opportunities and Limits of Global Governance by Clubs SWP Comments Ulrich Schneckener

The aftermath of the global financial crisis has seen an impressive sequence of summits – G20 in London in April, G8 in L’Aquila in July and another G20 in Pittsburgh in September. The fundamental question is: which multilateral forums are best suited for dealing with global problems? Club formats, in particular, have proliferated: from the G7/G8, the Heiligendamm Process and the Major Economies Forum to the G20 – which has in practice already met as the G20plus. The “club governance” label is widely applied to these developments. But what does it mean? What opportunities does club governance offer, and where do its limits lie? How does this approach com- pare with other forms of multilateral politics? What answers can it offer to the crisis of the established multilateral system? And what role can Germany, the EU and its member states play?

The debate over new formats is closely ment and felt bound by their own decisions connected with three long-standing the G8 on its own would still be unable criticisms of the G8: that it lacks legiti- to solve any major global problem, be it macy; that it is ineffective in implementing financial, trade, environmental or security. its own declarations; and that it does not Various alternatives have been proposed have the power needed for solving prob- in response to these criticisms. Some plead lems. On the first point, the group of seven for a formal expansion of the G8 to a G13, Western industrial powers plus Russia is G14 or G16; others call for the G8 to be not regarded as representative of the states superseded by the G20 or some other of the world and their populations, leaving forum, for example a “Global 25” (Inter- it open to criticism that it is “arrogant” national Task Force on Global Public Goods and without legitimacy. The G8’s ability to 2006). Other observers, on the other hand, actually achieve the goals it sets itself is look to smaller formats and speak of a “vir- also called into question, in fields as diverse tual G2” (United States, China), to which as economic policy, climate change and yet others – such as British Foreign Secre- development. Thirdly, it has long been held tary David Miliband – would like to see the that even if all its members were in agree- European Union added (G3).

Dr. Ulrich Schneckener, Head of Global Issues Division, SWP Comments 22 since September 2009 Professor for International Relations at Osnabrück University September 2009

1 Functions of the G8 discussions. These G8plus formats have What this discussion overlooks, however, come to largely determine the agenda, not is that whether or not it has exploited its only of the summit format itself but also potential adequately in recent years, the the annual meetings of foreign, develop- G8 still has important functions of the ment, interior and agriculture ministers, kind that are typical for multilateral where increasingly numbers of participants forums. Firstly, the G8 can – like no other are at the table too. In other words, the forum and certainly better than the Gen- transformation of the G8 is already well eral Assembly of the United Nations – draw under way. The G8 is increasingly trans- enormous political and media attention to forming from an actor setting out to shape particular issues (agenda setting) and take politics itself into an arena with changing them from the technical plane to the level participants where standpoints are ex- of heads of state and government. In the changed and joint declarations tussled past this has occurred, for example, with over. the topics of global warming, energy and Three formats have become apparent: food security. Globally operating NGOs Firstly, the G8’s dialogue with selected share a considerable interest in this func- African states and the African Union (in tion, which allows them to use the setting diplomatic language also called “Africa of the annual G8 summits as a platform for Outreach”); secondly, since 2003, the G8’s their own interests. Secondly, the G8 can discussions with the G5 states of Mexico, take on a pioneering function and encourage Brazil, South Africa, India and China, others to move in a similar direction. On which gave rise in 2007 to the Heiligen- climate change and poverty, developing damm Process; and thirdly – for the first and newly industrialised countries and time in L’Aquila – meetings in the frame- NGOs positively demand such a role for the work of the Major Economies Forum (MEF), G8. Thirdly the G8 can serve as a pathfinder, which was initiated in 2007 by US President identifying objectives and solutions that George W. Bush and continued by his suc- others can follow but which ultimately cessor Barack Obama. The MEF, which have to be decided by other bodies – for concerns itself with climate and energy example the United Nations – or placed in questions, comprises the G8 and G5 states a specific regulatory framework. Fourthly, together with the EU, South Korea, Indo- the G8 is fundamentally in a position nesia, Australia and Denmark. The Italian to promote concrete activities and pro- G8 presidency also extended invitations grammes and to mobilise the correspond- to Egypt (to the G8plusG5 meeting) and ing resources. This occurs for example in Turkey, Spain and the Netherlands (to a the context of capacity-building measures, session on food security). be they in fighting terrorism or money laundering, in nuclear non-proliferation or promoting public health. The World of the Clubs Through this expansion of formats the G8 – for lack of problem-solving powers of Global Dialogue Forums: its own – contributes to a proliferation of G8plus Formats “clubs” that are becoming an increasingly The most important function turns out, important structural element of interna- however – fifthly – to be the role of the G8 tional politics alongside the established as a global dialogue forum, as the summit at international organisations. These clubs are L’Aquila underlined yet again. Alongside neither regional organisations nor global the G8 participants themselves nineteen regimes but informal or weakly institution- other states and various international alised gatherings of state representatives organisations were represented in various with limited participation. Alongside the

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2 G8plus formats, one of the most important vague message of being responsible for the forums of this type is the G20, whose politi- most important global issues. cal weight grew at the expense of the G8 in the course of the global financial crisis and is regarded by observers and participants What Is Club Governance? alike as the future body for dealing with Whether these formats can be regarded as other global problems too. club governance, however, depends on the Beyond that there are various issue- extent to which they aspire to provide specific club formats such as the Financial governance services, whether in connection Action Task Force (FATF) to combat money with climate protection, the global econ- laundering, the Financial Stability Board omy, counter-terrorism or Middle East (since 2009 successor to the Financial Sta- peace. Club governance means groups of bility Forum), the International Energy states (sometimes with the involvement Forum (IEF) of major energy producing and of international organisations) explicitly consuming countries, the G4 (United States, exercising governance functions beyond EU, Brazil and India) in the context of the the immediate circle of actual club mem- Doha world trade talks, and the Middle East bers, in one or more fields of policy. The Quartet (United States, EU, Russia and functions involved may include providing United Nations). Forums of this kind also information and expertise, mobilising exist at the regional level: for example the resources, setting norms and standards, ASEAN Regional Forum (ARF) with its carrying out concrete measures, or estab- twenty-seven participants or the ASEAN lishing political frameworks (e.g. regimes) plus three format established in 1997, to deal with a specific problem. Although which includes Japan, China and South this occurs through bodies or fora with Korea alongside the ten ASEAN member selective membership purporting to act states. New inter-regional clubs without for the “common good”. This lofty goal, the involvement of Western states are also however, says nothing about either the emerging (South-South cooperation). These effectiveness or the problem-solving include the Shanghai Cooperation Orga- capacity of such fora. nisation (SCO) founded in 2001, which This definition of the concept – which is despite its name has more the character often used vaguely in the literature – makes of a club and is essentially dominated by it clear that not every group of states or Russia and China. Another variant is the club actually exercises or wishes to exercise IBSA Dialogue Forum, through which India, club governance. On the contrary, many Brazil and South Africa have been cooper- formations are better understood as ating since 2003. In June 2009 the first BRIC alliances (NATO), coalitions (Operation meeting took place, with the heads of state Enduring Freedom), lobbies or pressure and government of Brazil, Russia, India and groups (the G33 group in the WTO set up China getting together to discuss global in 2006) or cartels (OPEC) that in the first policy issues. The ultimate significance and place pursue the interests of their mem- role of such gatherings has yet to become bers and are less concerned with supplying clear. collective goods. Furthermore, there are These examples demonstrate the broad numerous informal meetings and “groups range of club formats. Some are designed to of friends” operating within the UN be permanent and more strongly institu- framework – unlike the G8 and G20. One tionalised (G8, G20, ARF, SCO), while others example would be the G77, which now are established to fulfil a particular pur- covers 130 developing and newly industri- pose. The agenda also varies considerably, alised countries and sees itself as a “lobby” from very concrete objectives to a rather for the Global South within the UN.

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3 Club Governance and Secretary Donald Rumsfeld that “the Other Forms of Multilateralism mission determines the coalition”. But Club governance in the sense defined here the “Bolivarian alliance” (ALBA) initiated is a specific method of global or regional by Venezuela in Latin America also follows political management, distinct from other this pattern of selective group formation. forms of governance. With respect to the The transition to club governance is cer- degree of institutionalisation, club gover- tainly fluid. In some cases such formats nance takes a “middle position” between may give rise to a club that asserts greater two fundamental types of multilateral powers and opens its membership to politics. The first is the institutionalised, others, even at the risk that this might en- formal multilateralism found above all in danger the consensus in the existing group. the United Nations, the WTO and regional But for club governance the criterion is organisations, including the EU. This type less the question of whether applicants is characterised by an inclusive member- are like-minded, and much more whether ship structure, regulated procedures and they are relevant for dealing with a partic- consensus-orientated decision-making ular problem. Thus actors possessing the processes, and produces issue-specific resources to provide collective goods may regimes and/or internationally binding be relevant, as may those whose involve- legal arrangements – often with corre- ment is of great importance for the legiti- sponding sanction mechanisms (e.g. exe- macy of particular measures. The expan- cuted through the UN Security Council sion of the old G7 to include Russia already or the WTO dispute settlement panel). followed this principle. The opposing model is selective multilateralism, practised by a grouping of like- minded parties pursuing particular inter- Strengths and Weaknesses of ests or values (“Coalition of the Willing”), Club Governance often focused on dealing with particular In order to tease out the advantages and concrete problems. This form is selective disadvantages of club governance it is in terms of both its participants and its worth conducting a cursory comparison agenda. The spectrum here ranges from with the other two types of multilateral ad hoc coalitions and informal networks politics. In view of the variety of different of government bureaucrats through to forms this must by nature occur in a lobbying and pressure groups. These forms strongly generalised form, if at least a few of cooperation can be larger or smaller, trends are to be picked out. The significant tighter or looser; in individual cases they aspects for assessing such forms of global may be directed explicitly against others or governance are: the legitimacy and effec- set themselves apart from other groupings. tiveness of decisions, the coherence of the In all cases institutionalisation is kept weak political approach, and the possibilities for in order to uphold the informality and mobilising resources. flexibility of the format. Often such formats Legitimacy. This criterion encompasses are dominated by a particular state that the question of participation (who is in- surrounds itself with allies. This mode volved in a political decision), the question applies especially to numerous US initia- of fair and transparent processes, and the tives under President George W. Bush, such question of acceptance of political deci- as the Iraq War coalition, the Proliferation sions. In all three respects legitimacy is Security Initiative or various counter- generally greatest in institutionalised terrorism formats (including Operation multilateralism, especially the United Enduring Freedom and the Trans-Sahara Nations system and regional organisations. and East Africa Counter-Terrorism Initia- The limited number of participants dictates tives) – true to the motto of former Defence from the outset that the legitimacy of selec-

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4 tive multilateralism and club governance club formats occupy a middle position. formats will be considerably weaker. This Because participation is relatively limited applies all the more if the circle of par- there is certainly a chance for coherent ticipants – as in the case of the G8 – is policy. But because – unlike in a “coalition widely regarded as unrepresentative and of the willing” – contradictory interests geographically skewed. Furthermore, the often have to be reconciled there is a desired informality is necessarily associated danger of contradictory formulaic com- with a lack of transparency, which can promises. impact negatively on acceptance among Resource mobilisation. If political de- those who are affected by the decisions or cisions are to be implemented financial and measures. In domestic politics this gener- personnel resources have to be mobilised. ally strengthens the executive and syste- So the question is: which format is most matically weakens the legislative, which is likely to persuade a participating govern- barely in a position to follow the informal ment to invest its own resources? Here discussion and decision-making processes too the result is relatively clear. Selective at the international level, still less to con- formats have access to considerably greater trol them. resources, at least in comparison to the Effectiveness. This dimension relates to funds supplied to the United Nations for the extent to which a body is in a position example. This is especially true when to achieve the objectives it sets itself. Here individual states take on a (hegemonic) the situation is broadly reversed: whereas leading role (e.g. the United States in the the UN system is very cumbersome and “global war on terror”). In the case of club ineffective when it comes to getting things governance the potential for mobilising done, the selective formats are in a much resources should be greater too, because better position to pursue their (generally) the actors expect a more efficient and con- restricted objectives. Focusing on “like- trollable use of resources, and feel their minded” partners certainly makes this interests are better safeguarded. easier – even if frictions and differences These four aspects should not be re- that can impair effectiveness do arise over garded as independent from each other; time, especially in alliances and coalitions. they reinforce each other positively or The outcomes of club governance, with its negatively. And this analysis says little concentration on “relevant partners”, could about the actual capacity to solve problems. turn out to be a good deal more favourable One can argue that selective multilateral- than with institutionalised multilateralism, ism may operate especially effectively and depending on the particular format and coherently, but whether it really makes a agenda. constructive contribution to dealing with Coherence. This concerns the question of global problems in the examples cited is whether decisions taken are broadly free debatable. Conversely, institutionalised, of contradictions and coordinated with one formal multilateralism may suffer con- another. Here too, the basic rule is: the siderable weaknesses, but with respect to larger the format and the wider its agenda, the legitimacy of global politics it also the more difficult it is to conduct coherent possesses clear strengths that neither club policies. This is illustrated very well by the formats nor still less alliances or interests UN system, and by most regional organisa- groups can demonstrate. This comparison tions. Furthermore, coherence is in most also demonstrates that the strengths of club cases purchased at the lowest common governance – despite the obvious problems denominator. With selective multilateral- of G8 and G20 – are to be sought in the ism coherence is a good deal stronger: as first place in the fields of effectiveness, a rule alliances act more coherently than coherence and resource mobilisation. But international organisations. Here too the whether this potential gets used depends

SWP Comments 22 September 2009

5 ultimately on the willingness of the partici- That said, this trend is a symptom rather pants to agree on common solutions and than a cause of the “systematic erosion” implement them politically, legally and (John Ikenberry) of the authority and capac- institutionally. Experience to date with the ities of international organisations and G20 summits has shown that while the regimes. former may happen under the pressure of Three developments have been largely a massive economic crisis, the latter is still responsible for this process of erosion since woefully inadequate. the beginning of the twenty-first century. The first relates to the political and economic rise of new emerging powers, which Club Governance and the strive for greater status in international Crisis of the Multilateral System politics, demand a greater say (e.g. in the Global governance today is characterised UN Security Council, at the WTO, in the by the simultaneity of the three described IMF and the World Bank) and call into types of multilateralism, with a particular question the traditional written and un- mix in each specific policy area. At the written rules in international organisa- conceptual level the different approaches tions. Sometimes they even abstain from can certainly complement one another. global arrangements and regimes that have But in political practice they compete for no chance of meeting their goals without political attention, concepts and resources, them (e.g. a climate regime without China which does not make tackling global prob- and India or global energy policy without lems any easier. At the same time we find Russia, Saudi Arabia and Brazil). in many fields – from security through eco- The second development was the Bush nomic and financial policy to questions of Administration’s contempt for established climate and energy – largely disconnected multilateral forums – preferring instead parallel processes in different formats. This unilateral action or the formation of “co- results in duplications, proliferating sum- alitions of the willing”. This orientation is mits and communiqués, and an overabun- seen most clearly in security policy (Iraq, dance of funds, initiatives and programmes non-proliferation, counter-terrorism), but – inside and outside the UN system. can also be identified in questions of inter- To that extent global governance is char- national trade and climate and energy acterised by highly fragmented structure policy. This instrumental stance towards that is shaped by different modes of manag- multilateral forums quickly found imita- ing and steering political processes. Driven tors, especially in the Russian and Chinese by the club-forming process, informalisa- leadership. tion is a growing trend. This can be recog- Thirdly, one can observe an ongoing nised especially clearly since 2001 in secu- “internal crisis” of the established organisa- rity policy (for example non-proliferation tions and regimes characterised – regard- policy or counter-terrorism). At the same less whether we are talking about the UN, time it has become easier for states to go WTO or IMF – by a massive backlog of “forum shopping”, seeking out formats that reforms. The key issues are cumbersome conform to their basic underlying interests decision-making processes, consensus- (and if necessary founding new formats), finding at the lowest common denomina- rather than operating within an existing in- tor, deficits in implementing decisions and stitutional framework and campaigning for sanctioning breaches, considerable deficits their position there. This phenomenon of in policy coherence, and highly specialised side-stepping into clubs and the associated technocratic regimes which lack attach- transfer of global political processes threat- ment to a political meta-structure and turn en to undermine the established multi- out to be poorly suited for dealing with lateral system and exacerbate its crisis. global problems. These three developments

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6 have reinforced one another and ulti- club formats can be used for informal mately encouraged the search for alter- negotiations, to search for compromises native formats. and to promote decision-making processes The concept of club governance does that have to take place in other frame- indeed offer opportunities to overcome the works. This applies especially to G-formats outlined crisis. But that would presuppose that tackle a range of different policy areas that such formats – especially the G8, the where there is also the possibility – unlike G8plus formats and the G20, but also the in single-issue regimes – to tie up larger regional groupings of states – place their packages through cross-bargaining. This activities at the service of the established applies for example to the overlapping organisations and regimes. The decisive fields of trade, technology, development, question is whether these formats are used agriculture, energy and climate policy, all to counteract the three developments of which are institutionalised in different described above. That would first require fora and regimes. club governance to embrace the growing aspirations and demands of the “new” powers and persuade them to participate The German and European Role constructively in tackling global issues. Systematic and reliable integration of the Secondly, the United States and other “new powers”, countering unilateralist major powers must be more strongly inte- tendencies and selective initiatives and step grated in multilateral processes. Although by step resolution of the reform backlog in this should be considerably easier with the the multilateral system are the overarching Obama Administration, structural factors goals that Germany, the EU and its mem- remain in existence (for example contin- ber states should be pursuing in both the gent on existing power resources) that will G8plus formats and in the G20. Unlike sometimes lead the United States (and others, Europe has a vital interest in others) to insist on a special role and cor- strengthening the multilateral system responding privileges. To what extent the because it otherwise risks losing more and United States, China, Russia (or also India) more influence in world politics. Further- go along with such multilateral processes more, the EU places more priority than will probably depend not least on whether others on legal regulations that require a club governance turns out to be an effective binding institutional framework – which mechanism for mediating between these most clubs are not capable of creating. states and thus facilitates effective action From this perspective the formation of on global problems. To illustrate with an ever new groups of states and the shift example: all efforts to tackle climate of capacities into such bodies is to be seen change are doomed to failure unless sub- critically. The club formats represent a stantial agreement is reached with the special challenge for the EU Council Presi- United States, China and India. dency and the EU Commission, which tend Thirdly, we must ask to what extent club to enjoy only “guest status” and generally governance can contribute to removing the have to make do with a secondary role. obstacles to reform in the international Moreover, in such formats the larger EU organisations and helping to make single- member states tend to dominate since they issue regimes more effective. This applies see themselves as capable of influencing equally to the reform of the Security Coun- world politics in their own right. This cil, the question of voting rights in the especially affects Germany, which – unlike IMF, the conclusion of the Doha trade France and United Kingdom – does not talks, strengthening the non-proliferation have a permanent seat on the UN Security regime, and a post-Kyoto climate agree- Council and therefore has in interest in ment. As “global mediating committees” being present and engaged in influential

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7 club formats. In the past this constellation has often led to rivalry and jostling for influence between the European partners, which has done nothing to enhance Europe’s influence. Just because more and more Europeans, most often accompanied by the EU Council Presidency and EU Com- mission President, take a seat at the table – like Spain and the Netherlands at the G20 summits – does not automatically enhance the EU’s influence. If the politicians and diplomats – including in Berlin – complain about the growth and the size of these meetings, one must object that Europe

These Comments reflect about their positioning and intervention in solely the author’s views. such bodies. When the Lisbon Treaty comes

SWP into force this could become a key task for Stiftung Wissenschaft und a future President of the European Council Politik German Institute for and for the High Representative for the International and Common Foreign and Security Policy – Security Affairs both for internal coordination as well as for Ludwigkirchplatz 3−4 representing Europe in the various clubs. 10719 Berlin Telephone +49 30 880 07-0 Fax +49 30 880 07-100 www.swp-berlin.org [email protected]

ISSN 1861-1761

Translation by Meredith Dale

(English version of SWP-Aktuell 47/2009)

The translation and pub- lication of this comments was made possible through the generous support of BP Europe and the collaboration of the Forum Ebenhausen.

SWP Comments 22 September 2009