The G20: Meetings and Other Docoments
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G-20: Meetings and Other Documents

The G-7, the Financial Stability Forum, the G-20,
and the Politics of International Financial Regulation

Tony Porter
Department of Political Science
McMaster University
Hamilton, ON L8S 4M4, Canada
905-525-9140 x23899

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Despite their deficiencies the FSF and the G-20 mark a significant development in the global political economy: the increased contemporary importance of legitimacy. Policymakers ininvolved in the process of their creation have seen elements of legitimacy, including representation of varied interests, as an important aspect of this process. This essay has suggested that this is not simply rhetoric and that the concept of legitimacy has something to add to prevailing approaches to international institutions such as the FSF and G-20. The FSF and G-20 are not simply the result of powerful states or business actors autonomously pursing their interest. Nor do they result from a more horizontal process of bargaining in which states collaborate for their mutual benefit. Rather they were created by powerful states to obtain the voluntary compliance of weaker states. The complexity of this unequal relationship, in which the powerful need the assent of the weak to their exercise of power, does not fit comfortably with approaches which dismiss the relevance of norms, or which treat the state-system as anarchic, or which see institutions as resulting from voluntary contracting for mutual benefit. Nor does it fit well with approaches which neglect the distinctive and specific significance of the types of process which can produce legitimacy in particular settings of power assymetries, especially where existing sources of legitimacy are in jeopardy as a result of crisis.

Scattered acknowledgements by policymakers of legitimacy-related factors in the creation of the FSF and G-20, while significant, do not by themselves allow us to fully appreciate the analytic utility of the concept. Legitimacy has been the focus of some useful scholarly analysis that seeks to identify its main characteristics. I have sought to broaden existing scholarly analyses, which tend to be state centric or focused on domestic polities, to address international legitimacy, including the contribution to it of technical and private authority. By identifying the ways in which international legitimacy is produced we can better understand international governance and criticize its deficiencies. .

The type of legitimacy issues present in the creation of the FSF and G-20, unlike existing long-standing debates on the legitimacy of international law, signify the emergence of a more complex structure of authority in global finance. Interestingly, neither NGOs nor formal international organizations have played a significant role in their creation. A focus on legitimacy such as this essay's reveals an alternative way in which powerful states end up expanding representation and participation in governance. We are likely to see more of this as the world economy becomes more integrated and complex and the complications in managing it become more severe.

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