G7 performance on macroeconomic policy

G7 compliance on its macroeconomic commitments has been strong in recent years, but there is room for improvement – especially in deliberation and decision making – and the leaders can use low-cost accountability measures to achieve higher compliance

Macroeconomics is a core issue for the G7, which coordinates global policy among seven of the world’s most advanced large economies and the European Union. However, despite strong compliance with macroeconomic policy commitments, G7 policy deliberation and decision making have been gradually declining since the start in 1975. At the 2024 Apulia Summit, G7 leaders should maintain momentum in delivering on their macroeconomic commitments, while increasing their macroeconomic policy deliberations and the number of politically binding decisions that they make on this subject.

Conclusions

Since 1975, G7 leaders have devoted 29,846 words, for an average of 12%, to macroeconomic policy in their communiqués. However, this has generally declined over time. In 1975 they devoted 52% of the communiqué to this subject – the all-time peak. It declined gradually until 1981 and spiked to 48% in 1982, but declined in 1983 and 1984. It spiked again to 33% in 1985, followed by a long decline until 1992. The next spike came in 1993 to 21%, and another in 1998 to 18%. Then came a long decline followed by a spike in 2020 to 30%. Deliberation then dropped to 6% in 2021, 2022 and 2023. 

Thus, from 1975 to 1982, on average G7 leaders dedicated 32% of their communiqués to macroeconomics. From 1983 to 1993, this dropped to 15%. From 1994 to 2019, it dropped further to 5%. From 2020 to 2023, it rose to a medium level of 12%.

Commitments

Between 1975 and 2023, G7 leaders made 328 public, collective, precise, future-oriented, politically binding commitments on macroeconomic policy, as identified by the G7 Research Group. They account for 5% of the 7,223 total commitments. Compared to other subjects, macroeconomic policy ranks 12th among 35 subjects, after development, energy, health, climate change, environment, trade, terrorism, regional security, non-proliferation, and crime and corruption. 

Decision making on macroeconomic policy passed through two phases. From 1975 to 1987, summits averaged a high 21% of commitments on macroeconomics. From 1987 to 2022, this dropped to a low 5%. However, within this second phase, there were two peaks in performance – the 1993 Tokyo Summit with 17% of its commitments on macroeconomics, and the 2020 virtual summit on the Covid-19 crisis in 2020, which dedicated 32% of its commitments to macroeconomics. However, this then dropped sharply: at the 2021 Cornwall Summit to only 4%, at the 2022 Elmau Summit to 3% and at the 2023 Hiroshima Summit to only 2%. 

Compliance

G7 members have complied with the 25 macroeconomic policy commitments assessed by the G7 Research Group at a high level of 85% – above the G7’s all-time 77% average across all subjects.

Over the years, G7 compliance has been relatively stable at this high level. The first two summits with assessed commitments, made in 1996 and 1999, averaged compliance of 100% each. Subsequently only three dips came. For commitments made in 2003 and 2004, compliance averaged 63% and 61%, respectively. It peaked again for 2008 with 100% and stayed high at 95% for 2011. It lowered to 63% for 2016. Then it increased to 82% for 2017 and again to 100% for 2018. 

For the 2020 virtual summit, during the Covid-19 crisis, compliance was 75%. Average compliance since increased to 82% for 2021 and to 100% for 2022. By December 2023, macroeconomic compliance for the 2023 Hiroshima Summit was 100%. 

Among G7 members, the highest compliance has come from the United States, Canada and France, each at 89%. During the G8 years from 1998 to 2013, Russia led with 95%. Then came the European Union at 87%, the United Kingdom and Germany at 85%, Japan at 81%, and Italy at 73%.

Causes and Corrections

To improve compliance with their macroeconomic commitments, G7 leaders can use low-cost accountability measures that have coincided with higher compliance.

The inclusion of a reference to the private sector correlates with higher compliance. The one assessed commitment with such a reference averaged 100%, much higher than the overall 85% compliance on macroeconomics. Commitments that link to jobs or employment average 86%, slightly higher for those without such linkages. Commitments with links to education performed particularly well, averaging 94%, compared to 84% for those without.

The number of companion commitments on related subjects does not appear to improve compliance significantly. However, a higher number of companion commitments on macroeconomics is correlated with a higher rate of compliance with the assessed commitments. For summits with more than 10 commitments on macroeconomics, their average compliance was 89%, compared to 75% for summits with fewer than 10 macroeconomics commitments. 

Overall, G7 leaders should continue to build on the momentum of the recent high performance in compliance and reverse their long-term trend of declining performance in deliberation and decision-making on macroeconomic policy.