Book Review – The G7, Anti-Globalism and the Governance of Globalization
The G7, Anti-Globalism and the Governance of Globalization edited by Chiara Oldani and Jan Wouters. London and New York: Routledge 2018. 182 pp., £115 hardcover 9781138583627
The book 'The G7, Anti-Globalism and the Governance of Globalization’, deals with some hot topics in the global debate on governance and its effectiveness: climate change, political governance, public debts and stability, quality of institutions and development, but above all the birth and growth of "populism" on a global scale. On these issues the contributions in the book are of interest: the editors Chiara Oldani, an Italian economist, and Jan Wouters, a Belgian political scientist, have prepared the volume to appeal to a wide audience in the diplomatic, academic and civil service spheres, with the objective of constructively enriching the global debate on governance.
The annual meeting of the seven leaders of the richest, but also most indebted, countries in the world is changing in the contents it addresses and in the context of reference. John J. Kirton focuses on the historical role of the G7 in global governance over complex processes such as globalization, peace, environment and common values.
G7 countries are experiencing a profound political change in favour of sovereign movements. According to J. Wouters and S. van Kerckhoven, the outcome of the British referendum in 2016 for exiting the EU and the election of Donald Trump as President of the USA represent the initial moments, confirmed, albeit in different ways, by the results of French, Italian and German elections. R. Marchetti explains that from a political point of view the traditional barriers between right and left are disappearing and globalization has become the common enemy.
John J. Kirton, E. Kokotsis and B. Warren show how climate change is today the most divisive topic among G7 leaders. President Trump had denied its existence in 2012; more recently he has reconsidered his position, while reserving judgment on the damage that man-made climate changes pose for the planet. Canada and Europe have implemented stringent policies to reduce greenhouse gases. However, it cannot be ignored that the Federal Republic of Germany, in contrast to the commitments made, continues to use, and indeed has increased, the production and use of lignite.
The development of the G7 countries is conditioned by the political cycle, but also by the policies of development, investment and management of large debts. Chiara Oldani focuses on the issue of the sustainability of the public debts of G7 countries. The negative effects of the financial crisis, which broke out over ten years ago in the US, were also the significant interventions of the state and the growing public debts. The empirical analysis in Oldani’s chapter focuses on the three G7 countries that are also members of the eurozone and who share stringent budget and debt rules, concluding that financial markets are able to anticipate whether a debt becomes unsustainable, but that the incentive towards destabilizing speculation is strong. R. de Santis and T. Cesaroni analyze the growth of the G7 countries from an "evolutionary" point of view and identify the key drivers for the growth of the G7 countries in the quality of the institutions and foreign investments; the two authors question the role that even investment in good infrastructure – defined in a broad sense – could represent for the sustainable development of the most advanced countries.
Since 2009, the G20 meeting, more technical and less political than the G7, is gaining ever greater space in global governance; it was able to coordinate necessary interventions on the international financial regulatory framework quickly and effectively, through the Financial Stability Board (FSB) after the subprime crisis. The FSB also plays an important role in pursuing the objectives of financial stability and systemic risk prevention.
This volume contributes constructively to the institutional and political debate, aiming to define the political challenges which are prominent in the global economy. However, the authors have not come to the conclusion that seems inevitable on the basis of the analysis. The G7 no longer has the role for which it was conceived; it could usefully be included in the G20 framework, as a restricted meeting.
As for Italy – analyzed in particular by Oldani in relation to the evolution within the Eurozone – with a close to zero dynamic of total factor productivity, it is destined to leave the Group of Seven soon.
Professor Rainer Masera is Dean of the School of Business at Marconi University, Rome.