The G-20 Meets, Talks, and Does Little
OECD Secretary-General Angel Gurría, Fed Chair Janet Yellen, and Britain’s George Osborne at the G-20 meeting in Shanghai on Feb. 27.
Photographer: Rolex dela Pena - Pool/Getty Images
Why can’t the Group of 20 large economies agree on a plan to lift world growth? According to a working paper released in January by Harvard University Kennedy School of Government economist Jeffrey Frankel, different sets of nations don’t just disagree on solutions; they even disagree on what game is being played. “When two players sit down at the board, they are unlikely to have a satisfactory game if one of them thinks they are playing checkers and the other thinks they are playing chess,” Frankel wrote in the paper, titled “International Coordination.”
Frankel’s framework helps explain what happened when G-20 finance ministers and central bankers met in Shanghai on Feb. 26-27. While reiterating their commitment to avoid currency wars, the leaders came away without an agreement to stimulate global growth through coordinated government spending, such as stepped-up infrastructure investment. “Investor hopes of coordinated policy actions proved to be pure fantasy,” David Loevinger, a former China specialist at the U.S. Department of the Treasury and now an analyst at fund manager TCW Group, said after the meeting. “It’s every country for themselves.”