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This chapter locates the discussion in the context of the theoretical literature on international norms, particularly that by Martha Finnemore and Katherine Sikkink. Much of this literature is interested in norm cycles, and the means by which norms come to be disseminated internationally. Building on this work, the chapter argues that the idea of dissemination does not quite capture what in fact have been a series of strategic negotiations between international and world society, often coming during the major peace settlements at the end of wars. Historically, this has often also arisen out of a coalition of interest between powerful state actors, and civil society groups. It is suggested that the framework of negotiation between international and world society allows us to understand this process in a particular way. It also demonstrates how the absorption of norms from world society into international society has complicated the latter's practices of consensus. It opens up major new issues about how consensus is to be developed within world society about changing principles of international legitimacy. These issues are explored in the context of the WTO and G7/8, and illustrated by the Ottawa Convention on Landmines and the formation of the International Criminal Court.

This chapter examines public sector spending in Japan in the broader context of those of other G7 countries, and assesses the effectiveness of the Ministry of Finance's policies to reconstruct the finances of central government compared with the performance of other central and federal governments. It is worth nothing that, despite all the economic and fiscal vicissitudes of the 1990s, Japan's economy remained the second largest in the world, and cumulative growth in real terms compared very favourably with that of the other G7 countries from 1989 to 1996; only Germany out-performed it. However, the slowdown in the Japanese economy after 1991 allowed first the United States and then all but Italy to catch up, and by 1998 to overtake it. General government expenditure, deficits, and debts in G7 countries are discussed, along with Japan's fiscal performance relative to that of G7 countries and the failure of fiscal reconstruction in G7 countries in the 1980s.

According to ‘fiscal institutionalists’, budget institutions at the governmental (as opposed to parliamentary) level, which lead participants in the budget process to internalize the costs of budget deficits, result in smaller deficits. Internalization is more likely where budget institutions are centralized, hierarchical, and transparent. Conversely, the more fragmented, the less transparent, and the more collegial those institutions, the more likely are the occurrence and persistence of fiscal deficits and debts. This chapter examines each of these elements and looks at the United Kingdom's experience with a fiscal code. It then considers the extent to which proposals for the reform of the central executive, the Fiscal Investment Loan Programme, and the formal rules of the central budgetary system might contribute to a reconfiguration of budget institutions and processes more conducive to low or declining deficits in the 21st century. The experience of Japan is compared with some other G7 countries that have been more successful in controlling their public spending, eliminating deficits, and reducing the level of central/federal debt.

The authors found this intriguing, as it is doubtful that senior political figures in the major economic powers knew what legal boilerplate was, let alone would advocate for particular clauses. There was policy content in the advocacy, however, over whether ‘market‐based’ (i.e. contractual) changes would suffice to provide for orderly restructuring of sovereign bonds of developing countries in financial crisis. In fact, the CACs in question have yet to face a major test under fire. The authors found little indication of belief among the more than 100 intimately involved people in the CAC debate that they interviewed that the clauses would be important determinants of restructuring outcomes.

This chapter examines the evolution of corporate taxation primarily (but not only) in the G7 countries with respect to the definition of a corporate taxpayer, corporate residency, corporate tax rates, corporate tax base, corporate/shareholder integration, and a few other categories. It questions whether this trend of convergence is still prevailing today.

This chapter explores the institutions and institutional changes needed to meet human rights demands, focusing on international executive power. It first discusses the functions of the domestic executive, and how the power of that executive is both facilitated and controlled by the governmental structure within which the executive operates. The chapter then turns to the differences between the international executive and the domestic executive, and to the appropriate methods to facilitate and control the international executive. Next, it considers the implications of this analysis in the context of functional organization, of the United Nations, of the international financial institutions (IFIs), and of the G-7/G-8. The chapter concludes with integrated recommendations.

This chapter examines the private governance of public debt and the nature of the world of creditor-debtor state relations. This world comprises a thin political superstructure, in which there is differentiated membership for states, and a thick technical infrastructure. Analysis of the political superstructure at the global level focuses on G7 and G20; at the EU level on the European Council, ECOFIN, and the Euro Group. At the global level the technical infrastructure includes the BIS, FSB, IMF, Paris Club, OECD, IOSC, and IASB; at the EU, the European Commission, Eurostat, the Economic and Financial Committee, ECB, EBA, ESMA, ESM, and SSM. The chapter also looks at the clearing houses, the privileged role of credit rating agencies, the financial-market lobbies, and financial-market journalism and PR. It shows how states seek to insure against markets through their debt management offices/Primary Dealers and central banks. It finishes by looking at the weak link: democratic engagement.

This chapter describes how the maintenance and fostering of trust was a crucial element in founding both the G7 summits and the European Council in the mid-1970s. Deeply anchored in the strong friendship between West German chancellor Helmut Schmidt and French president Valéry Giscard d'Estaing, both initiatives sought to deepen interpersonal relations as well as recover systemic trust in the Western (economic) systems in an informal, multilateral setting. The institutionalization and frequency of these meetings not only allowed for the development of a framework of informal coordination even in the absence of trust; it also provided a platform for the socialization of new leaders and a ritualistic display of Western unity, thus addressing potential international and domestic deficits of trust by “formalizing informality.”

Issues of risk are receiving a lot of attention in the debate over the relative merits of investment-based and pay-as-you-go social security systems. An important source of risk associated with these systems is political risk — the risk that benefit rules will be changed through the political process before or during one's retirement, thereby changing the value of retirement benefits. This chapter assesses political risk by undertaking a systematic empirical study of benefit reforms in the G7 countries from the mid-1980s through the mid-1990s. It shows that projections of rising costs under current law frequently provoke reforms that substantially reduce the benefits promised to middle-aged and younger workers. However, the benefits of citizens who are already retired or are near retirement are typically protected. This contrasts with the previous finding that efficient risk sharing requires adjustments of current benefits in response to demographic information. The chapter conjectures that there is a large political cost to changing retirement benefits that had already been promised and are currently payable.

This chapter presents international comparisons of patterns of economic growth among the G7 countries over the period 1960–95. The chapter is organized as follows. Section 12.2 describes the methodology for allocating the sources of economic growth between investment and productivity. Section 12.3 analyzes the role of investment and productivity as sources of growth in the G7 countries over the period 1960–95. Section 12.4 tests the implication of the neoclassical theory of growth that relative levels of output and input per capita must converge over time. Section 12.5 summarizes the conclusions of the study and outlines alternative approaches to endogenous growth through broadening the concept of investment.

Investigating a sample of 114 countries, Romer (1993) found a significant negative relationship between openness and inflation. This chapter investigates newly industrialized economies (NIEs) and the G7 to verify the robustness of Romer's findings. The empirical results show that openness and inflation do not have a regular relationship as stated by Romer (1993). The chapter is organized as follows. Section 4.2 describes the historical patterns of openness and inflation of NIEs and the G7. Section 4.3 investigates the relationship between openness and inflation using annual panel data. Section 4.4 presents the empirical results of a time series approach to the relationship for each individual country. Section 4.5 adopts a VAR analysis to examine the impacts of money supply on output in order to check the corollary of Romer's model (1993), and Section 4.6 concludes.

This book addresses the current account imbalances of the world's seven major industrialized countries. It is divided into three sections: origins of G7 current account imbalances; empirical studies of G7 current account and exchange rate adjustment; and theoretical perspectives on current account sustainability and adjustment. Part I provides a sophisticated and novel application of the venerable capital account theory of the current account. Part II concentrates on the possible empirical connection between the size of a current account imbalance and the way in which and the channels through which adjustment in that imbalance takes place. Finally, Part III uses economic theory and presents valuable and novel insights into the issues of current account sustainability and adjustment. An overview of the chapters included in this book is given.

This chapter addresses the nonlinear models of current account adjustment for the G7 countries. For most of the G7 countries, significant evidence of threshold effects in current account adjustment is observed. Statistically significant increases in exchange rate volatility during current account deficit adjustment regimes for the United States, Japan, and Germany are found. Additionally, it shows that compared to other G7 countries, the United States over the sample exhibited relatively wide thresholds within which current account adjustment is absent and relatively slow speeds of adjustment once these thresholds, especially the deficit threshold, are crossed. The U.S. current account deficit is in part an endogenous, general equilibrium outcome of global financial and macroeconomic integration. Moreover, it identifies a tendency toward G7 exchange rate depreciation during current account deficit regimes and exchange rate appreciation during current account surplus regimes.

This chapter examines the impact of the financial policies of industrial countries on the financial crises in emerging market economies. It analyzes the macroeconomic policies of the Group of Seven (G7) countries and the role of the G7 and the International Monetary Fund (IMF) in the management of international crises. This chapter identifies macroeconomic variables in industrialized countries that have major short-term impact on developing countries including growth rates, real interest rates and exchange rates.

This chapter talks about international unemployment. The common sources of increased unemployment include the pace of labor-saving technological change, structural changes in world trading relationships, changes in the international financial environment, and consequential changes in the macroeconomic polities of the G7 countries. The problem of international unemployment is rooted in the developments in the international trading and financial system since 1973. The pressure to liberalize goods and financial markets has created a deflationary climate that infected the worldwide economy.

The United States played an active role in the response to the euro crisis and decisions on the involvement of the International Monetary Fund. U.S. policymakers supported the use of the Fund in order to assist Europe and prevent contagion across the Atlantic. But the United States conditioned its support on euro-area-wide policies to extinguish the crisis, including creating the European Financial Stability Facility and European Stability Mechanism, using the European Central Bank balance sheet fully, and committing to banking union. This chapter traces the evolution of U.S. strategy during the crisis and the conversion of officials in Washington to the cause of completing the architecture of the euro area. The IMF staff also advocated deepening the euro area, and did so more strongly than many euro-area member states. The Fund’s advocacy, which is puzzling from the standpoint of its bureaucratic interest, reflects the preferences of the United States and other non-European members.

This chapter systematically examines the potential cleavages that run between the rising and the established powers in international politics. To that end, it analyses and compares the voting behaviour of the BRICS, IBSA, and G7 states in the United Nations General Assembly (GA). GA voting is particularly suited to identify the potential conflict lines between ‘new’ and ‘old’ powers as it runs the gambit of issues confronted in the international system and provides a forum where states can express their preferences relatively freely. Using a spatial model of voting (W-NOMINATE), this chapter analyses more than 500 roll-call votes in the GA over the period 2002–11.