The Construction of a New World Order and Korea's G20 Strategy

2010 EAI Special Report_Toward a New Global Governance: Korea and the G20

Authors

Yeol SonProfessor, Graduate School of International Studies, Yonsei University. Professor Yeol Son holds a Ph.D. in Political Science from the University of Chicago. He has previously served as a professor at Chung-Ang University, a visiting scholar at the University of Tokyo, and a visiting professor at Waseda University. His main research interests include Japanese political economy, international political economy, and East Asian regionalism. Recent publications include "Competing Visions of the East Asian International Order" (World Politics, 2009), "The Politics of Soft Power: Japan's Shifting Identities" (Journal of Japanese Studies, 2009), "Japan Between Alliance and Community" (East Asia Institute Issue Briefing 2009), and "Japan's New Regionalism: China Shock, Universal Values and East Asian Community" (Asian Survey 2010, 50:3).

Seungjoo LeeProfessor, Department of Political Science and International Relations, Chung-Ang University. Professor Seungjoo Lee graduated from the Department of Political Science and International Relations at Yonsei University and obtained a Ph.D. in Political Science from the University of California at Berkeley. He has held positions as a researcher at the Korea Institute for National Unification, a postdoctoral researcher at the UC Berkeley APEC Study Center, an assistant professor in the Department of Political Science at the National University of Singapore, and an assistant professor in the Department of International Relations at Yonsei University. Recent works include Northeast Asia: Ripe for Integration?(co-edited, Springer, 2008), and Trade Policy in the Asia-Pacific: The Role of Ideas, Interests, and Domestic Institutions(co-edited, forthcoming). He has also published numerous articles in journals such as the Korean Political Science Review, Comparative Political Studies, The Pacific Review, and Asian Survey.His main research areas include East Asian regionalism, global FTA networks, and the development strategies of East Asian countries in the era of globalization.

Jae-sung ChunProfessor, Department of Political Science and International Relations, Seoul National University. Professor Jae-sung Chun graduated from the Department of Political Science and International Relations at Seoul National University and obtained a Ph.D. in Political Science from Northwestern University. He previously served as an assistant professor in the Department of Political Science and International Relations at Sookmyung Women's University. Recent publications include "A Study on the Gaullist Diplomacy of Independence" (Korean Journal of Diplomatic History, 2008), "The Rise of Great Powers and Response Mechanisms: Theoretical Analysis and European Cases" (Korea Institute for Defense Analyses, 2008), "A Theoretical Study on the Emergence of Modernity in European International Politics" (The Korean Journal of International Studies, 2009), and "A Postmodern and Realist Critique of Constructivist International Relations Theory" (The Korean Journal of International Studies, 2010).

Hongshik ChoProfessor, Department of Political Science and International Relations, Soongsil University. He majored in Political Economy at Sciences Po (Paris Institute of Political Studies) and received his Ph.D. in Political Science from the same university. He has worked as a foreign affairs correspondent for the JoongAng Ilbo, a research fellow at the Sejong Institute, and a professor in the Division of International Studies at Catholic University of Korea. He is currently a professor in the Department of Political Science and International Relations at Soongsil University. His books include "I Don't Like the Same Things: Professor Hongshik Cho's Stories of French Culture" (Changbi, 2000), "The Underdeveloped Country Called America" (Social평론, 2004), "European Integration and the Future of the 'Nation'" (Purun-gil, 2006), and "One Europe: The History and Policies of the European Union" (co-authored, Purun-gil, 2009). His translated works include "Don't Sympathize with Beggars?" (Changbi, 2001), "The Social Use of Science" (Changbi, 2002), and "The Sovereign Debt Crisis: The Truth about International Financial Institutions and External Debt" (Changbi, 2006).

Executive Summary

The G20 as an International Institution

Since the U.S.-originated financial crisis of 2008 struck the global economy, nations have been engaged in international cooperation to overcome the crisis and have been making institutional efforts to construct a new order in its aftermath. The G20 Summit has emerged in this context and is establishing its position as a new Global Governance (GG) institution. Korea, which will host the G20 Summit in Seoul in November, must respond to the G20 as part of its global governance strategy, beyond simply ensuring the event's success. To this end, it is essential to accurately understand the G20's nature as an international institution before formulating an action strategy.

Global governance in the 21st century exhibits a complex character, possessing the traditional form of an institution reflecting the power distribution structure among states, while simultaneously evolving into a network-based institution due to the emergence of diverse actors and the linkage and complexity of issue areas. Networked institutions, as exemplified by the term "G-x process," are characterized by informality, flexibility, resilience, and voluntarism, encompassing governance structures that include the G20, which holds the status of the premier forum, the still-functioning G7/8, and the newly emerging G2. In this regard, if traditional institutions are referred to as GG 2.0 and networked institutions as GG 3.0, the current situation can be viewed as GG 2.5.

Fundamental Changes in International Politics

GG 2.5, as an international institution, reflects changes in international politics. International politics in the 21st century is rapidly transforming. First, power disparities are emerging between states that actively leverage the megatrends of globalization and informatization and those that do not, leading to shifts in the global power distribution structure. This is evidenced by the relative decline of the hegemonic power, the United States, the stagnation of traditional powers like Japan and Europe, and the rapid rise of emerging economies such as China and India. The 2008 financial crisis has accelerated these changes. International institutions, once dominated by a few Western developed nations, must now incorporate the voices of new groups of countries.

Second, it is well-known that the number and influence of non-state actors are rapidly increasing due to globalization and informatization. Corporations have expanded their power by establishing cross-border production networks and supply chains, and the rapid proliferation of the internet has led to increased activities by various non-governmental organizations. It has become difficult for any international decision to carry weight without considering their voices.

Third, and more importantly, globalization and informatization have presented the global community with new sets of problems, including environmental issues, terrorism, and energy resources. However, a closer examination of these issues reveals that issue linkage is occurring. Today's financial crisis is a matter that extends beyond the financial sector to trade, development, and environmental domains, making it extremely difficult to resolve with fragmented international institutions that were designed for specific issue areas.

As fundamental changes in international politics lead to networking among actors and an increasing complexity of issue areas, new forms of international institutions are being called for. Global governance in the 21st century has evolved to accommodate these changes in international politics, and the G20 reflects this trend to a certain extent.

The Evolution of the G20

The G20 has evolved through three stages: the establishment of the G20 Finance Ministers Meeting, its elevation to the G20 Summit, and subsequent changes. Following the Asian financial crisis, the G20 began as a meeting of finance ministers. The G20 Finance Ministers Meeting started to take the form of global governance that included not only traditional developed countries but also developing countries. The G20 Finance Ministers Meeting was designed as a forum for policy coordination that included developing countries, which had previously been on the periphery. At this stage, rather than functioning as global governance that encompassed the interests of both developed and developing countries regarding the international political-economic order, the G20 tended to be utilized by developed countries as a platform for neoliberal education for developing nations. The G20 was primarily utilized from an institutionalist perspective for resolving the Asian financial crisis and from a realist perspective for hegemonic co-optation.

The G20 underwent a transformation, being elevated to a summit meeting in the wake of the 2008 global financial crisis. The G20 Summit was launched in the process of contemplating how to shape the framework of the future international political-economic order, based on the structural changes in the world economy since the 2000s, such as the rise of China and India, and the phenomena of issue complexity and networking.

Since its inception, the G20 Summit has held four meetings, effectively responding to the global financial crisis and making multifaceted attempts to establish new global governance. The G20 Summit began by focusing on discussions for international cooperation to resolve the global financial crisis, and has since expanded its agenda to include crucial issues for the establishment and operation of global governance, such as reform of the international financial system, sustainable growth, and development issues for developing countries. Furthermore, it is newly incorporating agendas necessary for sustainable global governance, such as the environment. This reflects the shared recognition among G20 member states that the effective management of global governance should not be limited to resolving the financial crisis.

Characteristics of the G20

The G20, which has emerged through this historical process, exhibits the following characteristics. First, the G20 possesses a more flexible, networked character in terms of membership, agenda setting, and meeting operations, rather than the form of a robust international institution. Second, in the process of resolving economic crises, it functions as a network of institutions (network of international institutions) or a meta-institutional entity that readjusts the roles and operational methods of other existing organizations, such as the G8, IMF, and World Bank, and redefines their relationships. Third, the G20 Summit is growing beyond its role as an economic crisis resolution body to encompass other issues, such as the environment, development cooperation, and political security issues (as evidenced by the expression of opinions on the sinking of the Cheonan), demonstrating its scalability across issue areas. Fourth, due to the informal and networked nature of the G20 Summit, the institutional form can be variable.

Within the G20, individual actors also exhibit new characteristics. They utilize knowledge, ideology, agenda-setting capabilities, persuasive power, alliance formation within multilateral structures, and network power to steer the institution in line with their national interests. In this arena, power dynamics involve not only familiar modern phenomena such as shifts in the power distribution structure but also changes in the institutional environment that entail transformations in the nature of the power field itself, leading to the emergence of soft power and network power as important determinants of national strength. For example, the debate on capitalism models currently underway at the G20 Summit can be seen, in a broader sense, as a competition utilizing new power elements.

Despite these new characteristics, it is crucial not to overlook the persistent realist aspect of power balance among states. It is necessary to emphasize the new power politics inherent in the flexible network. The G20 Summit demonstrates the duality of cooperation and competition among nations, leading to new and diverse forms of power competition, such as institutional balance and soft balancing. Each actor strives to maximize its national interests through cooperation and competition within the institutional framework.

Strategies of Major Powers

The United States, China, and Europe are the forces that effectively lead the G20. Early in the G20's establishment, the United States accepted the summit as a temporary forum for discussing responses to the global economic crisis and continues to view it as one component of a complex network for global governance. Therefore, the U.S. maintains flexibility to alter its stance and policies depending on the evolution of the institution and its strategic utility in advancing U.S. global strategy.

On the other hand, China perceives the G20 as an attractive and useful institution that aligns with its strategy of gradual great power emergence, having officially entered the global governance arena through this forum. Consequently, China has a greater structural interest in the revitalization and institutionalization of the G20 than the United States. Moreover, the G20 serves as an opportunity for China to learn and generate soft power in global governance, in addition to the rise of its economic influence.

The European Union seeks to extend the model of international cooperation and integration that has succeeded in Europe to a global scale. The G20 can be understood as part of this strategy, and the EU possesses the potential and expertise to pursue the agenda of institutionalization. However, unless the EU overcomes internal differences and divisions among its member states, it will likely remain unable to exert influence comparable to that of the United States or China.

Countries other than these three major powers are initially content with being recognized as new actors in global governance. However, as this framework becomes institutionalized and expertise accumulates through repeated experience, they are expected to be able to check existing powers or lead the formation of new alliances with them. Particular attention should be paid to the future roles of countries such as India, Russia, and Brazil.

Overall, while the G20 has included emerging powers, the agenda has largely been led by the United States and Europe, who have shaped the key issues. This suggests that their historical soft power continues to be influential. However, China has already gained socialization and learning effects within the global governance system, and it is predicted that other powers will also participate in this process in the future... (continued)