The era of global government?

Here at the G20 summit, leaders representing 85% of world GDP are meeting in Brisbane, Australia.

It's not just the G20 group of world leaders who are meeting. Also here are the heads of the International Monetary Fund and World Bank. There's also the associated organisations, such as the B20 (business), C20 (civil society), L20 (labour), T20 (think tanks), and Y20 (youth).

With politicians, businesses, NGOs, labour groups, thinkers and the young, these look like the elements that could make up a future global government. Of course, we're not at that stage and may never get there.

But, what has become evident is that global markets are more interconnected than ever, and that means that what happens in one part of the world economy affects others. When a US bank went bust, it had widespread repercussions in Europe, for instance. So, better global governance is needed, but is the G20 doing the job?

The G20 came into its own during the global financial crisis when US President George W Bush called the group together in Washington in the autumn of 2008 to exert co-ordinated governance on the world economy since it was apparent that the US banking crisis had spread via increasingly inter-linked markets.

Thereafter, in London in the spring of 2009, the G20 again came together and pledged to support the world economy through more government spending and the major central banks also acted in concert to shore up credit lines for banks.

Since then, the G20 started to meet less often - once a year now - and its purpose is increasingly being questioned.

This is especially as the leaders of the world's biggest economies, the US and China, are arriving from another big summit, Apec in Beijing, where a significant breakthrough on climate change was announced by Presidents Obama and Xi who agreed to limit emissions. So, as they come to meet Europeans and others who are not part of the Asian Pacific Economic Co-operation, what they can additionally achieve at an economic summit is being asked.

Back to why the G20 has an economic mandate. The lesson from the last financial crisis is that global markets are not properly regulated. So, as the world becomes more connected, there is greater need for those responsible for our economic security to be on top of the latest developments.

Brisbane is hosting the G20 this year

And that's the role of the G20, since it roughly represents the biggest economies in the world. I say approximately because the membership itself is a point of debate. Why shouldn't Europe's fourth largest economy, Spain, be a member (except via the European Union which is the 20th member) when its GDP is greater than Argentina's? And should the membership be fixed if the world economy is in flux, and Argentina probably has other issues on its mind right now.

There's also a big question over what does an economic focus should include.

When I asked Australians about what they expect from the G20, the answer that I heard most was that the leaders should address climate change, political instability such as the Ukraine and the Islamic State, and public health challenges like Ebola. There was a uniform expression of surprise when they then heard that the agenda was focused on growth, global governance of issues such as taxation, trade liberalisation, etc. In other words, pure economic issues.

Can economics be separated from politics or public health? The leaders of the labour and civil society groups don't think so. They pointed out to me that political risk and Ebola will have repercussions on the global economy.

The United Nations exists to address a broader set of issues. Still, the UN, with its all-inclusive membership of the world's countries tend to be sluggish in acting. So, the G20 has risen in importance and is more representative than the G7 that excludes the world's second largest economy plus regions like Africa entirely.

Of course, there's still a huge gap between a bunch of countries getting together to talk about global issues and a global government. Supporters and critics of the G20 that I spoke to do agree on one thing which is we are far from the day when we will have a government that governs the world or even the world economy.

Even some sceptics of big summits, who view it as a lavish waste of money, say that there is a need for international cooperation as issues such as governing global financial markets, climate change, public health which can't be done by individual countries.

But, there is a limit. For instance, there are countries at the table at the G20 which have decent recoveries while others struggle with looming recession. To what extent can there be global action when economic conditions are so disparate? Would taxpayers in the US agree to borrow more to spend to stimulate their economy that also spills over to aid European growth?

That's why the G20 aim of raising global growth by two percentage points of GDP may be achievable but it will be done individually by countries according to what best suits them. In a sense, that's to be expected. But, it raises the question as to what coordination can be realistically expected.

Hypothetically, a global government could re-allocate, much as a federal or central government now does to help regions/provinces/states. It could also regulate global markets, address climate change, fight Ebola, etc.

But, of course, who gets to run that government and how democratic it is would raise questions that are certainly far beyond the G20. Still, as the world becomes more interconnected, the questions over global governance will loom larger.