Since the onset of the current economic crisis, a global debate on the regulation of the new economic reality has intensified. Starting with three basic assumptions (the Westphalian system of states, national policies and its hard-law norms), the paper will examine the activities of the Group of 20 towards developing a new global economic regime, from the aspects of the regime theory and global governance concepts. Upon analyzing three distinct models of transnational governance, the paper will show the relevance of soft law in successful implementation of new global norms.
The current economic and financial crisis has resulted, inter alia, in various ideas, plans and proposals ...view middle of the document...
So, the second issue to be challenged is whether measures devised and taken at the level of national states are sufficient to manage the crisis global effects. Thirdly, it has been widely and stubbornly accepted that policies can only be implemented if they are legal, i.e. based on hard-law norms each state passes. Hence, the third issue is whether hard-law norms, inevitably limited by state boundaries, are appropriate to regulate international/global issues. Furthermore, intensive issue linkages from various domains of economics, finance, development, energy, social inclusion, ecology and food security present another challenge to the world economy and its regulation. The paper will challenge the three issues by showing the relevance of soft law, as one of the opportunities for such coordinated policies to be successfully implemented on the national level.
The methodology used in the research programme will predominantly feature its negative heuristic in the following way. First, the regime theory and governance concepts will be analyzed against the current crisis environment and the three basic assumptions explained above. Secondly, the process of induction (including both qualitative and quantitative methods) will be applied to the work of the G20 in the period 2008-2013. Then, a hypothesis of an emerging G20 regime will be tested against basic regime characteristics, and finally, empirical evidence of new governance models will be analyzed against the hypothesis.
GLOBAL GOVERNANCE AND POLITICS
Since the crisis outbreak in September 2008, a plethora of diverse political ideas, plans, statements and declaration were made on the causes, effects and prospects of the current crisis. Actions have been implemented to support individual institutions (the so-called ‘too--big--to--fail’ institutions), capital injections have been made to enhance banks’ capital, guarantees were extended, banks nationalized and reference rates cut. International financial institutions have also stepped in to provide additional lending at more favorable conditions, especially for developing countries. In 2011, new measures were introduced aiming at the reduction of government and private debt, raising new finance, cutting budgets, etc. In 2012, it was widely accepted that certain structural changes in global economic/financial order might be necessary. In 2013, the focus of the agenda has been changed to put more emphasis on sustainable economic growth, employment and further tightening of coordinated financial regulation.
Intensive political interplay at both national and international level about the crisis causes and effects have resulted in somewhat conflicting views and different proposals on how to handle the crisis have been brought forward.: The intensity of these political processes and widening of their scope may lead to a conclusion that a new global/transnational social space is coming into being – a supraterritorial social space not limited by...