ABSTRACT
All crises have a rhythm. The crisis strikes. Leaders rush to extinguish the flames with policy actions. A process of reappraisal and assessment occurs, and reforms are designed to address identified failures. Eventually normality returns in part due to the actions of leaders and concord is replaced with disagreement and disputes. The 2008-2009 financial crisis followed this dialectic of crisis management, reform and eventual relapse and return to dissention amongst leaders at the G20.
The narrative and regulatory leap the G20 and central banking communities made in the 2008–2009 crisis has in large part proven durable in years since the rapid construction of the G20-FSB-SSB architecture was created. But it is not impervious to assault. President Trump’s America First policy has seriously undermined the effectiveness of the G20 forum. Faced by the COVID-19 pandemic the G20 failed the crisis management test, unable to act without strong US leadership. Unlike in 2008–2009 the G20 did not marshal leaders to act collectively against the virus and its economic effects. Instead actions were splintered, national and partial.
However the pressure of crises decision making forced leaders to choose the same levers – a giant extension of state authority, fiscal stimulus and central banking action to address the crises. Once again crises clarified options, pushed leaders in the same direction, prompted the abandonment of prior positions in the rush to deliver workable solutions. This latest challenge demonstrates yet again the paradigmatic effects of crises: they open up options, make the impossible possible and allow leaps from one set of norms to another. Perhaps further leaps are possible in 2020 and beyond in response to other global risks, most notably climate change risk.
