The designation of the Group of Twenty (G20) as the “premier forum” for international economic coordination is the biggest innovation in global governance since the end of the Cold War. Given its composition, the G20 is well-positioned to serve as a leading framework for collective action among the world's major established and emerging nations in addressing some of the world's most pressing global problems. But to live up to this potential, the G20 must surmount several hurdles that were evident at its fourth summit, in Toronto, in June 2010. The most important challenge is managing the heterogeneous interests of its member states, which are diverging as the global financial crisis begins to fade.
The G20 encompasses the world's most influential established and emerging countries, which collectively represent two-thirds of the world's population and generate more than 85 percent of global domestic product (see Table 1 for a list of G20 members). It is the only international forum in which the major developed and developing players meet exclusively in formal equality at the highest level of government. It thus stands in contrast with the two-tiered UN Security Council, the weighted voting of the Bretton Woods institutions, or the more restricted Group of Eight (G8). The creation of the G20 underscores the ongoing diffusion of global economic and political power from the West to the developing world—particularly to Asia—and the recognition that the effectiveness and legitimacy of economic policy coordination depends on the contributions of emerging market economies. It also underlines an evolution of global governance away from formal institutions toward flexible, informal, multilateral groupings of limited membership.