The idea of a G-20 summit is a good idea. Relative to other, more established international institutions, it’s a better set of countries to tackle the world’s overarching need to get on track to a pattern of growth and prosperity that’s sustainable for the long haul. But nobody’s actually expecting anything incredibly useful to come out of this week’s meetings. The world would, however, be a better place with a high-functioning G20 and this CAP report recommends some ways we could make that a reality.
Ultimately, however, in economic terms the world is suffering not just from a lack of institutions but from something of a leadership gap. The United States is a major economic player. But the economic realm isn’t like the military realm where we have a hegemonic position. By some measures, the European Central Bank actually presides over a larger economic unit than does the Federal Reserve and by all measures the European Union as a whole is bigger than the United States. Then beyond the two economic superpowers, there are a number of other really major players. That means the world really can’t just assume the U.S. is going to pull a rabbit out of a hat and put everything back together. But at the moment, nobody else seems especially interested in stepping up.