Salvaging the G-7

Building a Post-Cold War Architecture

With the collapse of the Soviet Union a critical test facing the world is whether the liberal democratic states can build cooperative relations in the absence of a unifying threat. The answer so far is not encouraging. Economic coordination and collective action among the major industrial powers are rare these days. The problem is not just one of coordinating economic policy but also of laying a new political foundation for post-Cold War cooperation. The world stands at the brink of a new era and its major statesmen in Europe, Japan and the United States are having trouble with the "vision thing." Their inability to grapple with post-Cold War architecture constitutes an enormous failure of imagination and responsibility.

What currently passes for policy coordination is the so-called Group of Seven process of the largest industrial democracies. As a mechanism for synchronizing economic policy to exert leadership over the world economy, this process is largely a failure, so much so that at this year's World Economic Forum in Davos, Switzerland, the noted economist C. Fred Bergsten remarked that "the G-7 is dead."

The absence of meaningful policy coordination stands in stark contrast to the pomp of annual G-7 summits. Year after year the leaders of the United States, Germany, Japan, France, Great Britain, Canada and Italy meet in a ritualized photo opportunity. A huge intergovernmental operation churns out bland official communiqués that paper over dysfunctions in the global economic system, or vague joint commitments to growth and prosperity that substitute for actual accord. Such shallow protocol is inadequate for dealing with real tensions arising from trade conflicts, global economic malaise or alliance burden-sharing.