Journal of Global Economics

World Governance and the G-twenty: An Alternative Design

Abstract

Cohen SI

An expanding globalization causes global failures, similar to economy failures encountered in the national economic system. Global failures take other forms, and are likely to be more severe in the future because of the entry in the world scene of leading countries that have distinctly different economic systems (for instance, China, India) from leading incumbents (US, EU), and because the new competition (country cum system) is likely to be perceived by newcomers and incumbents as a zero sum game. It is crucial in such circumstances to have a design of world governance that can respond adequately to global failures. The G-20 is one such design, but this is handicapped by its narrow scope (i.e., GDP), and undemocratic composition (selection of individual countries and not regional representation, next to being inconsistent and outdated). The paper formulates and applies an index of influence potential that combines population and GDP, and which is measurable at the region and country levels. The paper projects these applications for the near future, comes up with more representative participations by regions/countries in world governance, and explores effects of the changing distribution of influence potential on global development and economic systems.