At its September summit in Pittsburgh, the Group of 20 leading economies in the world proclaimed themselves as the supreme global economic institution, replacing the increasingly flimsy and unrepresentative Group of Eight and outlining greater power for their new grouping. The dominant public reaction has been positive. After all, the G20 represents 85 per cent of the world’s economy and two-thirds of its population and though large in number it is still small enough to be effective.

But the G20 actually violates fundamental principles of international co-operation by arrogating for itself important financial decisions that should be shared by all countries. In so doing it also emasculates the sovereign rights of small countries that have long been the prime defenders of...