G-20 as a Second Best Solution

December 08, 2010
Economists are fond of speaking about second best solutions so it was perhaps not surprising that my friend and former colleague Shahrokh Fardoust, one of three editors of a new World Bank volume on the G-20 development agenda, invoked this familiar idea in the face of a friendly but pointed critique of the G-20 by CGD/Peterson joint fellow Arvind Subramanian. The occasion was yesterday’s  launch of Post Crisis Growth and Development: A Development Agenda for the G-20, the conference volume from a June 2010 gathering in Busan, South Korea, jointly organized by Korea’s Presidential Committee on the Seoul Summit and the World Bank. I kicked off and chaired the session, drawing on CGD work, including my own reporting and analysis of the Seoul Summit.  Arvind and fellow panelist Moises Naim, a senior associate of the Carnegie Endowment for International Peace perhaps best known as the visionary former editor-in-chief of Foreign Policy, both pushed hard on the idea that the G-20 development agenda is wrong to devote so much time and space to what are mostly national policy issues (i.e. financial inclusion, social safety nets, infrastructure). Better, they said, for the G-20 to focus on increasing the provision of scarce global public goods. Moises calls this approach “Minilateralism” and invoked the 80-20 rule in urging that small groups of powerful countries, more or less like the current G-20, get on with solving the world’s problems. Shahrokh responded that there is much that those who organized the conference and compiled the volume would have liked to task the G-20 with accomplishing. The conference organizers felt constrained, he said, by a keen sense of the need to focus on what was politically feasible. The G-20, he said, is merely a second best solution, but it’s all we’ve got. Having recently seen Mary Zimmerman’s great new production of Leonard Bernstein’s Candide, it was all I could do to keep from breaking into a chorus of “The Best of All Possible Worlds.”  Sadly, of course, we don’t live in the best of all possible worlds, but merely in the world of second bests. Update: Shahrokh has responded to Arvind and Moise’s critiques in a post called Growth and Development Nuts and Bolts for the G-20.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.