Rethinking the Global Economic Governance: Some Considerations on a Perspective Reform of the G7

Abstract

Since decades the G7 is an informal body where important decisions for the global economic governance are taken. The current composition of the G7 does no longer mirror the current balance of economic and demographic powers. New powers have emerged, and these may legitimately claim a seat in the world’s most influential economic policy club. Using well-established power indices, I show first the distribution of power between the incumbent members of the Group. Second, I propose two possible new compositions. Third, in the perspective of an increasing integration between the EU countries, I introduce one EU representative in the G7 in place of the current four European countries. These new compositions of the G7 are more representative of the current state of the world, give voice to a larger share of the world population and distribute the power between the major global actors more evenly than it is today, eliminating the overwhelming leadership of the USA. The analysis is based on power indices that evaluate ex-ante power and assume a decision process similar to that which goes on in governments and parliaments, where the members vote and where parties have a share of votes corresponding to their share of seats.