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Competition among the Three Systems for Global Governance
and Their Future Prospects

Guo Shuyong
Director, Center for G20 Studies, Shanghai International Studies University
August 26, 2016
[PDF in Chinese]

Paper prepared for an international workshop on "Making Global Governance More Effective and Inclusive: The G20 and The United Nations," hosted by the School of International Relations and Public Affairs of the Shanghai International Studies University (SISU), the Center for G20 Studies of SISU, and the G20 Research Group of the University of Toronto, Canada; co-hosted by the UN Association of China and the Shanghai UN Research Association; and sponsored by the Lowy Institute for International Policy of Australia and the University of Toronto's Munk School of Global Affairs' Asian Institute, Bill Graham Centre for Contemporary International History, East Asian Studies Program, David Chu Asia-Pacific Program, and the Department of Political Science, held at SISU, Shanghai, China, on August 25-26, 2016.

I. The Definition of Global Governance and Its Features

Global governance is a multilateral practice of international governance emerging with the in-depth development of the international society. Originally, it was an idealistic notion, but has now evolved into one that combines the features of idealism with realism. Global governance is a practical and historical framework that is being constructed by international cooperation. The historical starting point of it can be traced back to the beginning of globalization. The reason is that ever since globalization started in Europe, there have emerged certain issues that need to be handled by global effort, like trading policies and postal standards. However, the beginning of academic research on global governance cannot simply date back to the era prior to the 1930s. At the initial stage of the 20th century, the notion of "international society" started to expand from Europe to the rest of the world. It was only from then on that nations beyond Europe were qualified to involve in international affairs. The milestone for such an expansion is the creation of the League of Nations, which marked the first comprehensive institution of global governance. The League of Nations, at that time, became instantly an unprecedentedly authoritative and effective institution of its kind. However, this is a rather short-lived institution due to its failure of well-functioning in global governance, in particular, global economic governance. Its significance lies more in its role as a prelude to the establishment of the mechanism of the United Nations. Therefore, in the real sense, the grounded and substantive academic research on global governance starts with the end of the World War II, when the United Nations was founded.

What is the nature of global governance? In essence, global governance is a practice in which the members of the international society take concerted actions to solve global problems. This essence defines the following features of global governance. Firstly, it is a practice in response to crisis. Global problems pose considerable challenges to the survival and development of the international society. It is to the common interests of all the sovereign nations and to the common interest of the entire mankind for the international society to address the global problems that they are confronted with. On account of these, the overwhelming and urgent global problems that have engendered extensive and interconnected influence are enabled to mobilize the international society to positively get involve in global governance. Secondly, global governance is featured by its capacity of international coordination. As global governance takes place at the phase of when international relations plays the role of coordination, it is the basic fact that the national systems of individual sovereign states are still the major factor that influences the international order. However, the international cooperation in terms of global affairs takes place beyond government. Therefore, such forms as the coordination between the superpowers, multilateral coordination, North-South coordination, and South-South coordination remain the major means of global governance. Despite the escalating importance of international rules by law in global governance, political and diplomatic manners will still play effective roles within a long period of time. Thirdly, global governance consists of international interaction and institutional innovation at multiple levels. Such interaction is represented not only by the coordination between the superpowers and different national groups, but also by the competition and cooperation between international institutions. In fact, international institution is a reflection of the power distribution within a certain period of time. It is a natural law that an old international institution be replaced by a new one. It is just because of such alteration of international institutions that the system of global governance gradually secures improvement.

II. Comparison between the Three Systems of Global Governance

Many multinational organs emerged one after another since the ending of the WWII, managing to provide international public goods with each country's own characteristics and in line with each country's interest. Therefore, several influential global governance systems came into being.

At present, one of the three main global governance systems is the one with the United Nations as the core. As it followed the rules determined by the UN Charter, the extensive governance system is the most influential and the most legitimate one of its kind, with the five permanent member states and all the member states of the United Nations play the core part. Its critical weakness is that the United States has too much power, which prevents it from making substantial resolutions.

Another global governance system has the Group of Seven as the core. The seven countries, the most powerful ones at that time, formed this multilateral coordination agency in the 1970s to prevent oil crisis and other global economic crises. This system had been leading the global economy for a long time, with the advantage of quickly-reached agreement as it had adequate resources provided by the seven countries and the disadvantage of incomprehensive resolution as the Soviet Union and other developing countries were excluded, making the system unable to adapt to the changing global political situations.

The last one is represented by the G20. Against the background of the development of emerging economies, this system is formed by the five most rapidly-developing emerging economies and the Group of Seven and is still on its way forward. These countries proceed from the fundamental interest of developing countries to change the global economic orders that had been dominated by the Group of Seven for many years. While the gap between the emerging economic system led by China and the Group of Seven led by the United States was narrowing down rapidly. The United States and other members of the G7 suggested the establishment of the Group20 to deal with the urgent international oil crisis. The Group20 is both inclusive and effective, because it includes main developed and developing countries, makes its member states no more than 20 and adopts comparatively flexible way of setting agenda and organizing conferences. It brings the active role of the United States and China into full play, which actually draws in the strong points of the United Nations and the Group of Seven. However, it cannot solve the problem of bureaucratic operation of the secretariat, while the Group of Seven had been doing well in this respect.

III. Competitive Fields of Three Systems

Competition of international regulationsis a main driving force to institutional changes. It is also a product of international regulation innovation, international social development and international political comprehensiveness, and it suggests the basic rule of international politics. From a historical perspective, peaceful institutional competition could be constructed, and is a major path to avoid the Thucydides Trap and to realize global power shift. In fact, the international institutional competition will be more fierce because of the multi-lateral process of international relations especially economic globalization. G20, G7 and the UN have all been seen to display competitive status in the following fields.

In the first place, they will compete with each other in the area of financial crisis management (FCM). Financial crisis management is the initiative target and traditional responsibility of international governance, and also the most competitive field among international governance organizations. Up till now, G20 possesses an obvious advantage in this area because its international mobilization, summit organizing and flexible arrangement demonstrate the functional position to cope with crisis. Though G7 is another important FCM organization, its lack of representativeness and ability of mobilizing new rising economies limited its competitiveness. G7 adopts an institutional arrangement of new rising economies dialogues, but it could not encourage their willingness successfully. Besides, the UN does not have advantage in this field at all.

In the second place, global security governance will stand out. International security governance is another traditional frequent governance area. This is the fundamental basis of the UN, and the UN has sufficient legitimacy and legal resources, besides compulsory measures, thus is equipped with incomparable advantage. But G20 and G7 have played important roles in this area as well. Especially for G7, it functioned as a significant part when dealing with anti-international terrorism. In the new context, G20 will increasingly strengthen its international discourse power in this field depending on its larger representativeness and focus on international development governance.
Thirdly, they want to show their muscles over the new field of international development governance. Recently, development governance has been paid lots of attention to by the international society. It is the fundamental global question raised by rising developing counties, needing to be resolved by the UN and other international governance organizations. Since the development issue is global and general, the UN is the most necessary platform. Nevertheless, the successful implementation of all the proposals of the UN requires coordination and collaboration among major countries, thus demanding G20 and G7 to make important promise and to regulate and implement manipulative plans. G7 has long ignored the international development governance and could not make great contribution to it. G20 has given enough attention to it in the past few years, competing and cooperating with the UN. The G20 Hangzhou Summit will treat the UN 2030 sustainable development guidelines as an important agenda, which suggests that, G20 is situated in a more advantageous situation on its initiative in global governance.

Finally, global cultural governance may be the new battle for the three big systems of global governnence.UNESCO has been working on promoting the cultural governance in the past 20 years and several documents have been published since then. The rise of ISIS and the failure to give a quick answer to the question of international terrorism both suggest the existence of cultural governance deficit under the world order. G7 is experienced in this area because of its cultural homogeny, thus it has historical experience in cultural globalization. Meanwhile, it is the cultural homogeny and Euro-American centered culture that deprive G7 of the civilization dialogue and various cultural governance experience. In contrast, G20 is still new in this field. It has not experience on general legislation as the UN, nor has been working on carrying out cultural strategy as G7. In this sense, study of this area requires to be enhanced.

IV. The competition of the "Three Big" brings about a new system of global governance

Hangzhou summit is a great event in the history of global governance, and it will produce various influences. On the one hand, it will witness the competition and cooperation of three governance systems, and further reveal the advantage of the G20 in the global governance system; On the other hand, Hangzhou summit will speed up the birth of a new system of global governance.

Predictably, a new system of global governance will be firmly established with four aspects of characteristics. Firstly, the G20 will appear on the international stage with a new gesture. By strengthening its mechanism, rules operability and commitment accessibility, the G20 can integrate the advantages of both the G7 and the UN. Thus, the G20 is becoming a center of the new global governance network. Secondly, in the new global governance system, there will be a "Shared Leadership" of the G20 system together with the UN system. Such kind of "joint leadership" is not a consensus of China and the UN, but China and the UN will play a decisive role. The G7 will be gradually integrated into the framework of the G20, and play its role through interaction and coordination with the BRICs. Thirdly, the current agenda of global governance will greatly expand and gradually realize the "whole coverage" in the field of global governance. Through the competition and cooperation between the G20 and the UN, the global governance agenda will further expand to the non-economic fields, especially to the security, health, health, climate change and other fields. Fourthly, perhaps the most appreciable thing is that China and other emerging economies will play a more active and responsible role in the aspects of agenda initiative, subject formulation, rules establishment and commitment execution.

The above four aspects are interconnected. Without the development and mechanism of G20, there will be no guarantee for the G20's governance, and no decisive victory in the further system competition; Without the important role of China and other emerging economies, it will be difficult for the G20 to obtain substantial development and get continuous advantage to the G7; Only China and other developing countries enter into the global governance stage, the people's livelihood agenda can attach much more attention than the traditional core agenda such as finance and economics. It is a reflection of democratization in the international relations.

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