Those who’ve focused on the shortcomings of the recent G-20 Summit have dismissed it as a “circus without a ringmaster,” “Hamlet without a prince”, and “a rather dull scrum“.

If anyone was expecting the one-day conference to become a “Bretton Woods II”, they were certainly over-optimistic. We didn’t witness a complete reinvention of international monetary management rules and no one walked away believing that a new framework for global cooperation had been set in place.

G-20 Summit Shortcomings

The limits of the summit’s significance are readily apparent. For instance, although those gathered pledged to do whatever might be necessary to stabilize the financial system, no one seemed willing to divulge any specific numbers with respect to individual nation members’ stimulus plans.

The G-20 was basically silent on the hot topic of re-examining and re-calibrating exchange rates, too. Sometimes silence is significant and the failure to address this topic in a meaningful way definitely cut against the significance of the session.

It’s no surprise that the group will need to gather again in April. Some analysts argue that this production of “Hamlet without a prince” was doomed to fall short of major change due to the absence of the next U.S. President, Barack Obama. Although globalization is slowly but surely rendering the U.S. a significant player instead of the player in the field, the presence of a lame duck certainly curtailed the drive for members to try to iron out future plans.

A recent BBC News story from Bridget Kendall wondered if a second version of Bretton Woods, the 1944 agreement between allied nations on the management of international financial and monetary affairs, might be on the way. The article noted the possibility of a major power shift on the immediate horizon and the potential to see substantial changes in the way the world approaches an increasingly globalized economy.

The G-20 Summit didn’t measure up to those lofty standards. However, a closer examination of the summit reveals that it’s limitations didn’t prevent it from planting seeds that could result in significant changes for the global economy.

A Departure from Old Models

The most important part about a G-20 gathering may be the simple fact that it is not another G-8 meeting. The expansion of participating voices represents a significant departure from a system dominated by the U.S. and Europe.

The G-20 may very well represent a crumbling of the “old guard” and it certainly creates previously non-existent opportunities for other nations to add their perspective to international economic questions. That recognition of increasing globalization could set the stage for even bigger changes in the nature of international agreements.

Although we may be a long way from the G-125 some advocate, there is no question that the days of trying to manage a world economy from a handful of western capitals are numbered. The meeting involved a great deal of discussion of how emerging economies should have an increased role in a variety of functions, particularly with respect to the International Monetary Fund.

Put simply, the very fact that a G-20 assembled is meaningful, regardless of the actual policy decisions that did or did not emerge.

That’s not to say that the sole value of the summit was symbolic, though. There actually were some interesting and potentially significant decisions to come out of the meeting.

G-20 Accomplishments

One of the most staggering things to come out of the meeting was the expression of the sentiment that global financial markets are not sufficiently self-regulating and that governmental interventions would be a necessity if the global economy is to be stabilized. Although it would be a stretch to argue that international policy since Bretton Woods has never been truly “laissez faire” in nature, this up-front support of active intervention represents a significant change in overall expression and may be evidence that those with a more market-oriented approach are losing influence.

The pledge of G-20 nations to stabilize international markets came with some specific policy proposals, too. There was a strong call to increase the regulation of hedge funds and advocacy for heightened oversight of credit rating agencies in recognition of stubborn credit problems.

Trade issues also made it to the table. Notably, the membership agreed to a 12-month prohibition on new protectionist measures. Calls for the re-initiation of the Doha trade talks were also well-received. Those who had wondered if recent global events would lead to more cooperation or increased isolation seemed to have received an answer in support of cooperative trade and engagement.

It would be premature to argue that we’re on the brink of a massive structural change in international monetary and trade policy. The G-20 conference clearly didn’t yield a sea change. However, despite its limitations, it does appear as if the foundation for a different approach to world economic issues may be in place.