Global political economy and global governance have experienced immense success over the years and at the same time numerous challenges. Some of the critical areas in the global economy include: employment of youths, the banking sector, resource mobilization, economic sustainability and much more. Economic governance globally affects the various stakeholders globally in handling global economic governance and the critical issues in it. The various stakeholders play a vital role but are limited at the same time due to the regulations and requirements in the governance of the global economy. Is global economic governance run effectively? This is a question that seeks detailed answers while looking into the factors within the various sectors of the global economy.
In terms of the legal character of Global economic governance, there is a lack of particular governing law thus flexibility in decision-making on different aspects of the ever-changing economy. This helps in the adoption of vital and useful decisions which helps boost the economy and ignore the ones that seem unfavorable. For instance, G20 which is a global governance entity relate to IMF and other international financial institutions for a much stronger global economy. Lack of restrictions on the different actions and decisions taken by such powerful global institutions is dangerous to the different stakeholders who may be adversely affected and have no control over it. The fact that decision-making bodies are not held responsible should be tackled by providing a well-planned framework for decision making since it affects the interest of many.
In the assessment of global economic governance, various factors have to be put in place including, the goal and objectives, legal principles, actors of the global economy and their actions. In any given initiative, goals and objectives are very crucial since they provide a guideline on what has to be done. In the global economy, their goal mainly aims at environmental, political, economic and aspects of social cultural. Therefore, goals and objectives have to be defined and achievable although the different stakeholders do not agree fully with views and opinions on the same. The agreement is crucial to all the stakeholders of the global economy so as to ensure there are compliance and corporation.
International law is also crucial in the global economy and should be respected by all the stakeholders. Some stakeholders are considered powerful and may not be limited by international laws and also the fact that the number of laws implemented is not effective to fully coordinate the functions of stakeholders in the global economy. Compliance and respect to international law should be shed on aspects such as: sovereignty, nondiscrimination, treatment of legal persons, treatment of natural persons, environmental responsibility, the principle of good faith and good administrative practice.
In the aspect of sovereignty, it states that global economic governance should not interfere with the activities of a sovereign state in running their affairs. This posed a challenge because, if the activities of a sovereign state affect another state, there will be a rise in conflicts and therefore the need of a common body in which states report to regarding the activities that they undertake. Nondiscrimination comes in for the fact that different states are different in terms of powers, resources and much more. This implies that different states should be given significance despite their level. Human rights should also be given significance in the global economy.
The environment is a crucial element in the global economy and environmental responsibility is key. In as much as there need to develop the economy, environmental impact assessments is crucial. The principle of good faith should also be applied. This involves fairness and honesty in matters concerning the global economy and therefore stakeholders should be responsible and adhere to different aspects that need to be addressed. Global economic governance requires good and effective administrative practice in dealing with matters concerning global economic governance. Here, transparency, timely decision making, predictability and accountability is key among nations is key to ensuring that nations corporate and work together for a better economy.
The global economy needs comprehensive coverage which looks into aspects that cover all the stakeholders interest in economic systems internationally. For instance, in terms of finance; allocation of resources, investors, financial intermediaries, financial institutions and much more ought to be addressed. This suggests that global economy should have a bigger picture of the economy, flexibility and dynamic approaches. Although there is need of comprehensive coverage, there exists a lot of conflicts due to lack of agreement on appropriate ways of dealing with global economic issues. This implies that a mechanism for conflict resolution should be applied to ensure the smooth running of global economic affairs.
Institutions in global economic governance should be given a mandate and the capacity to coordinate specific duties in the global economy. This ensures consistency in their operations and good corporation with other stakeholders. When there is coordinated specialization, procedures are followed correctly considering all the impacts that they may have in the economy. The mechanism of coordination helps to deal with tension in the different sectors of the economy and that there is common interest that is aimed at to drive the economy.
In the case study of G20 summit, Does the G20 have a strategic objective for Global Economic Governance? The document of Los Cabos looked into details of environmental sustainability, job creation and matters of social security although they do not give a definite guidance on how this will be achieved. This means that policies are made without a given procedure and possible ways of fulfilling them. G20 did not engage directly on dealing with these issues but Came up with work programs which included global economic development as an agenda.
The work program put in place looked into financial issues, regulatory reforms and the new markets. G20 created a committee that addressed the issues of prices in markets, food security, and structures of governance in development banks and the International Monetary Fund (IMF) and in ensuring that there is the availability of required resources to carry out their mandate. This measures are yet to be fully implemented and therefore, the outcomes have not been realized. Sustainable environmental development is also an objective under G20. A document was drafted on the planning of infrastructure, building and construction and also operation. The fact that this document was drafted, it did not provide a clear approach and implementation approach therefore making it impractical.
In the provision of international legal principle adherence, G20 have failed to show consistency in adherence to this principle. Some states have assumed responsibility without considering others. This creates conflicts and misunderstanding among nations. The decision-making process of G20 is also complex and is imposed to non-participants through international bodies like IMF and therefore abusing the principle of sovereignty. The aspect of nondiscrimination is critical since it requires that parties be treated similarly by international laws in a similar situation while those in a different one be treated differently. G20 have failed in this principle since they do not practice favorable treatment as required.
Good administrative practice is a principle that should be practiced by G20 however, it has not fully complied since participation by states is not adhered to effectively. The meetings of G20 on global economic issues are not given the attention they deserve because there is no corporation in all the stakeholders. G20 does not adhere to accountability and responsibility for their action due to a limited mechanism that holds them accountable. This means that going further without effective mechanism implemented, different sectors of the global economy will experience much difficulty. It is contradictory when it is stated that G20 observes predictability, sound decision making and transparency while its action does not depict what they stand for.
G20 aimed at addressing various issues of the global economy which included: policies of monetary and macroeconomics, the inclusion of finance, employment, energy, sustainable growth, labor, food security and much more. Strategies put in place by G20 does not clearly reflect their interest in dealing with these issues since they did not incorporate all the stakeholders who have a crucial role in the same. For the way forward, it is vital for G20 to involve all the non-state and state actors for a comprehensive coverage and for the success of their projects and objectives.
Therefore, in the case of G20 there are various strategies put in place with the five principles to ensure global economic governance is a success. The principles put in place have proved to be impractical since G20 has failed to embrace them in the bid to realize a good global economy. Some of the critical issues pointed out include: lack of inclusion of all stakeholders; partial involvement in participation, lack of application of international legal principles and much more. G20 ought to formulate their structures and come up with applicable strategies so as to realize a good global economic governance.
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Mayer-Foulkes, D. Economic Challenges for Global Governance. SSRN Electronic Journal. http://dx.doi.org/10.2139/ssrn.1139651
Nadvi, K. (2008). Global standards, global governance and the organization of global value chains.Journal Of Economic Geography, 8(3), 323-343. http://dx.doi.org/10.1093/jeg/lbn003
Frieden, J. (2012). Global Economic Governance After the Crisis. Perspektiven Der Wirtschaftspolitik,13, 1-12. http://dx.doi.org/10.1111/j.1468-2516.2012.00391.x
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