“ The key challenge for the G7 is reconciling its role as a global financial ‘firewall’ with the growing demand for a more inclusive and transparent governance architecture that reflects 21st-century economic realities” 75 100
G7 PERFORMANCE ON INTERNATIONAL FINANCIAL INSTITUTIONAL REFORM 1975-2025
50
25
0
Compliance (%)
Deliberation (% words)
Commitments (%)
COMPLIANCE The G7 Research Group has assessed compliance with only one commitment on IFI reform. That commitment, made in 2009, averaged 78% compliance. Ger- many, Japan, the United Kingdom, the United States and the European Union had full compliance, and the remaining members – including Russia, which was then a member – had partial compliance. Full compliance required action in three areas: expanding the International Monetary Fund’s New Arrangements to Borrow, implementing the IMF quota and voice reforms that had been agreed to in 2008, and implementing compet- itive processes for selecting the heads and senior officials of international financial institutions. Partial compli- ance reflected action in only two of those areas. The assessment revealed a two-tier pattern. While there was universal success in the mobilization of cap- ital, through the expansion of the New Arrangements to Borrow, sys- temic institutional reforms varied. The high-scoring members demon- strated full compliance by funding the IMF, adopting the Amendment on Voice and Participation, and formally
endorsing a merit-based, transparent selection process for IFI leadership. The members that achieved partial com- pliance – specifically Canada, France and Italy – failed to take steps towards implementing competitive selection pro- cesses for IFI leadership. In contrast, Russia did not fully comply, as it was the only member that had not adopted the Amendment on Voice and Partici- pation, reflecting concerns over quota reduction; however, it supported more competitive leadership selection within IFIs. RECOMMENDATIONS The G7’s trajectory on IFI reform reveals a paradox: it excels at resource mobili- sation during systemic shocks, as seen in the universal success in funding the NAB, but struggles with structural institutional reform. The 78% compli- ance rate for the 2009 summit suggests that financial stabilisation is politically easier than redistributing institutional power. The key challenge for the G7 is reconciling its role as a global finan- cial ‘firewall’ with the growing demand for a more inclusive and transparent governance architecture that reflects 21st-century economic realities.
// MARIA FERNANDA ERTHAL Maria Fernanda Erthal is pursuing a degree in international relations at IBMEC University in Rio de Janeiro. She joined the G7 and G20 Research Groups in 2024 as a compliance ana- lyst, contributing to research on reform within the International Mon- etary Fund. She has a strong interest in the reform of international financial institutions and the role of emerging economies in global governance.
X-TWITTER @g7_rg www.g7.utoronto.ca
79 globalgovernancemedia.org
Made with FlippingBook - professional solution for displaying marketing and sales documents online