3. The G20 and the Dilemma of Asymmetric Sovereignty: Why Multilateralism Is Failing in Crisis Prevention

The G20 is not able to move forward with reforms necessary to prevent future financial crises. Successes as in crisis management cannot be transformed into joint crisis prevention. The global regulation of financial markets, agreed upon at previous G20 summits, was intended to make the international financial system more stable and more resilient against future crises. Alas, the resultant expectations were unfulfilled. Likewise, we cannot expect meaningful steps towards a reinforcement of the global regulation of financial markets from this year’s G20 summit in Australia. At least as serious are the failure of the Doha Round and the incapability of the G20 to prevent it, despite the frequently voiced commitment to a multilateral order. The structural crisis in global regulation of today is not least the result of an asymmetric sovereignty in financial politics: States possess only marginal influence on international financial markets, but they are liable in times of crisis. The result is a re-nationalization of financial policies. At the same time, the increasingly critical perception of globalization, in particular in OECD societies, complicates the further evolution of the multilateral trade order.