Do Global Forums Influence Domestic Macroeconomic Policies Anymore?

The G-20 has emerged as the premier forum for macroeconomic cooperation since 2008. It coordinated fiscal and monetary stimulus, strengthened the global financial safety net, pledged to resist protectionism and competitive devaluations, pledged to make exchange rates more market-determined and coordinated structural reforms to reduce global current account imbalances and achieve a collective growth goal. But was this coordination rhetoric or reality? Did countries change their policies because of these global agreements or was it business-as- usual masquerading as coordination? The paper reports the results from in-depth interviews with 61 leaders, central bank governors, finance ministers and officials from across all G-20 countries, including Janet Yellen, Kevin Rudd, Ben Bernanke, Haruhiko Kuroda, Jack Lew, Mark Carney, and 55 others. The paper shows that the G-20 does indeed influence domestic macroeconomic policies, but the strength of this influence varies by policy area, whether the economy is advanced or emerging, whether the economy is large or small, and several other factors. The paper presents a new framework for thinking about what forms cooperation can take, how different countries use the G-20, the transmission mechanisms through which global forums influence macroeconomic policies, and the factors that determine the strength of that influence.