G-20 -A new membership system to boost the legitimacy of the G20 at a critical time for the global economy

Who should the '20' be?

Alex Brill, James K. Glassman | National Taxpayers Union White Paper

The G20's legitimacy depends on having as members those nations most capable of improving global financial markets and preventing economic crises. Thus, the specific selection criteria must be based on the three objectives to which G20 heads of state agreed in 2008:
1. Restoring global growth,
2. Strengthening the international financial system, and
3. Reforming international financial institutions.3

With these goals in mind, we conclude that appropriate potential membership criteria should be based on measures of:

• A country's economic size and global economic importance,
• A country's adherence to rule of law and other principles consistent with market-based economies, and
• The size of a country's financial-services sector and the magnitude of inbound and outbound cross-border banking activity (financial interconnectedness).

Using these objective measures, we conclude that:

• Four current G20 countries do not qualify for membership in the G20. They are, in alphabetical order, Argentina, Indonesia, Mexico, and Russia.
• Four current nonmembers should replace them. They are Malaysia, Norway, Singapore, and Switzerland.

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